Mortgage broker vs bank in Canada: pros and cons

Mortgage broker vs bank: the comparison

Point	Mortgage broker	Bank (direct lender)
Who lends the money	Not the broker: it finds a lender for you (FCAC)	The bank itself
Product choice	The products of the lenders it works with — ask which ones	Its own products only
Who pays them	Usually the lender, by commission; generally no fee to you (FCAC)	Paid through the margin on its own loan
Applications	One application, several lenders compared	One application per bank; you shop around yourself
Oversight	Provincial licence (FSRA, BCFSA, AMF, RECA, FCAA, FCNB…)	Federally regulated banks; FCAC supervises their consumer obligations
After signing	Your loan is serviced by the chosen lender, not the broker	Your loan stays with the bank

Source: FCAC, "Getting preapproved for a mortgage", consulted November 11, 2026. A non-standard file (self-employed, weak credit) can involve a brokerage fee: the broker must tell you beforehand.

Pros and cons of a mortgage broker

Pros: access to many lenders (FCAC notes this may give a wider range of products to choose from), one application, and someone who knows each lender's criteria — useful if you are self-employed or a bank turned you down.

Cons: it only offers the lenders it deals with, and it is paid by the lender you pick. Ask two questions before signing: which lenders do you work with, and how are you paid on this loan? Some banks do not deal through brokers: their offers will not show up in the broker's comparison.

Pros and cons of a bank

Pros: a direct relationship with the institution that holds your loan and, with a federally regulated bank, a renewal statement at least 21 days before the end of the term (FCAC).

Cons: you only see its rates. The posted rate is only a starting point — see how to negotiate with mortgage lenders — and FCAC advises talking to several lenders.

How to check a mortgage broker

FCAC points out that the provinces and territories regulate mortgage brokers, and that you can contact them to confirm a licence or make a complaint. In Ontario it is FSRA; in British Columbia BCFSA; in Quebec the AMF (not the OACIQ, which regulates real estate brokerage); in Alberta RECA; in Saskatchewan the FCAA; in New Brunswick FCNB. Payotte profiles publish the regulator and, where one exists, the number: you check it at the registry.

To choose one next, see how to choose a mortgage broker and this month's mortgage rates.

Frequently asked questions

Is it better to use a mortgage broker or your bank?

In Canada, a bank lends you its own money and offers only its own products; a mortgage broker does not lend: it finds you a lender among those it works with and, according to the Financial Consumer Agency of Canada (FCAC), generally charges you nothing, because the lender pays it a commission. The broker's advantage is choice (several lenders, one application); the bank's is a direct relationship with the institution that holds your loan. Either way, compare at least two written offers. Brokers are regulated by the provinces (FSRA in Ontario, BCFSA in British Columbia, the AMF in Quebec, RECA in Alberta): check the licence at the registry.

Does a mortgage broker cost anything?

Usually not: according to FCAC, mortgage brokers generally don't charge fees for their services and receive a commission from the lender when they arrange a transaction. Ask in writing before you start, especially if your file is non-standard.

Does a broker always get a better rate than a bank?

Nothing guarantees it. A broker compares the lenders it works with; your bank can sometimes do better, especially against a written competing offer. The safest course is to have both offers in hand.

Who regulates mortgage brokers in Canada?

The provinces and territories (FCAC): FSRA in Ontario, BCFSA in British Columbia, the AMF in Quebec, RECA in Alberta, the FCAA in Saskatchewan and FCNB in New Brunswick, among others.

Sources

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