Bank or broker: where should you get your Canadian mortgage?
The headline answer: a mortgage broker will almost always get you a lower rate than walking into a bank branch. They’re paid a finder’s fee by the lender, not by you, so direct cost to you is zero. They have access to monolines (First National, MCAP, Strive, Equitable, etc.) that don’t deal with consumers directly and that consistently undercut the Big 6.
The honest comparison:
| Bank (branch / bank channel) | Mortgage broker | |
|---|---|---|
| Rate floor | Big 6 sticker, then negotiable to ~match | Best of 30+ lenders, including monolines |
| Penalty math (fixed) | Posted-rate IRD — often 3–5× higher | Standard IRD at most monolines |
| Approval flexibility | Tight credit boxes; rigid documentation | Broader — multiple underwriters to fit |
| Bundling | Free chequing, line of credit, etc. | None — pure mortgage |
| Servicing | Branch, app, in-person | Lender’s servicing (varies; usually fine) |
When a broker wins (most cases)
- You want the lowest rate and have a clean financial profile (T4 income, decent credit). The 0.20–0.50pp the broker shaves off the Big 6 quote is real money — typically $5,000–$15,000 over a five-year term on a typical mortgage.
- You’re self-employed, new to Canada, or with non-standard income. Brokers know which underwriters look past the income type.
- You care about penalty math. Big-bank fixed mortgages use posted-rate IRD that can produce $20,000+ penalties; most monolines available only via brokers don’t.
- You want to shop without ten credit pulls. Brokers do one pull and shop multiple lenders.
When a bank wins
- You have a complex banking relationship with the bank — significant assets, business accounts, lines of credit — and the relationship discount they extend is real (push them on this; verify in writing).
- You want a HELOC bundled with the mortgage as a readvanceable product. These are well-integrated at TD, Scotia, and National Bank in particular.
- You’ve already negotiated a rate that matches the best broker quote you can find, and you genuinely value walking into a branch.
How to actually shop
Get at least one broker quote and one bank quote before signing. The broker quote disciplines the bank: bring it to your branch and ask them to match. They often will, partway. If the broker still wins by 0.10pp or more, take the broker.
There’s no penalty for getting multiple broker quotes — but pick brokers who go through different lender networks (Strive, First National, MCAP, Lendwise). Two brokers quoting from the same wholesale lender is the same quote twice.
A broker is paid by the lender that funds your mortgage, typically 0.5–1.0% of the loan amount as a one-time finder’s fee. Some brokers will rebate part of this back to you on larger mortgages — worth asking.