Broker vs. Bank


In the Canadian mortgage industry 30% of borrowers use a mortgage broker, while 50% are still going to their local bank to find funding for their home purchase or mortgage refinance. When deciding whether to use a mortgage broker or to walk into your local branch, here are a few things to consider:

Mortgage brokers work with multiple lenders, including your bank allowing them access to the majority of products and rates on the market. With this access a good mortgage broker will not only deliver a wealth of industry knowledge but will be able to shop around to find the best product, at the lowest rate for their client.

Due to the variety of lenders mortgage brokers have access to (all of which are regulated by the Bank of Canada), mortgage brokers can assist in many cases where your traditional bank cannot. Whether there is an issue of credit, employment, down payment or with the property a broker should be able to find the right lender for each situation. Currently banks decline 35% of clients who walk through their doors without being able to offer them a second option.

Brokers also have the ability to shop around for you even after you have received an approval. If a competing bank offers a lower rate, your broker can call you to review both potential options. On the other hand banks will not call you when their competitors are offering lower rates.

When you work with a broker only one credit check is performed saving you multiple hits that you would bear if you did the shopping around yourself. The more checks you have on your credit, the lower your credit score becomes over time.

In 95% of cases, there is no fee associated with using a mortgage broker. The lender pays the broker a finder’s fee for their services. In short, using a mortgage broker saves you time and money, in addition to providing you with a wealth of industry advice!

Kelly Drinkwater
Mortgage Agent
Verico SAFEBRIDGE Mortgage Solutions

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