The Canadian mortgage market has four main channels: mortgage brokers, banks, digital lenders, and rate comparison sites. All four will give you a mortgage. Only one of them is legally required to act in your interest. Here is what each actually does, how each is paid, and what happens to your personal data when you hit "submit."
Side-by-Side Comparison
| Factor | Mortgage Broker | Bank (Direct) | Digital Lender | Rate Aggregator |
|---|---|---|---|---|
| Who they work for | You (fiduciary duty to the borrower) | The bank (bank's mortgage specialist is a bank employee) | The lender (digital lenders are still lenders) | Whoever pays the highest referral fee |
| How they're paid | Finder's fee from the lender (~0.5–1.2% of mortgage, paid by lender — not you). No broker fee on standard A deals. | Salary + performance bonus from the bank | Origination fee charged to borrower (sometimes embedded in rate) | Lead referral fee from lenders per click or per application submitted |
| Access to multiple lenders | Yes — multiple lenders including banks, monolines, credit unions, B-lenders | No — one lender only | No — one lender only | Displayed only — shows rates from paying partners; does not actually shop your file |
| Your data | Submitted only to lenders you choose and approve | Retained by the bank for cross-selling | Retained; often sold to affiliate marketers | Sold as a lead to multiple lenders simultaneously — you may receive 5–10 calls |
| Speed | 24–72 hours for pre-approval; 5–10 days to fund | 2–5 days for pre-approval; 7–14 days to fund | Same-day to 48 hours pre-approval; 5–7 days to fund | N/A — they don't fund mortgages |
| Best for | Most borrowers, especially self-employed, new to Canada, complex situations, or anyone who wants the best rate across the market | Borrowers with deep banking relationships seeking rate discounts tied to existing accounts; branches with existing advisor trust | Tech-comfortable borrowers with straightforward files, good credit, T4 employment | Research and rate benchmarking only — do not submit personal information |
What Rate Comparison Sites Don't Tell You
Most rate comparison sites in Canada are not mortgage brokers — they are lead generation businesses. When you enter your name, email, phone number, and financial details and click "Get My Rate," you are not starting a mortgage application. You are submitting your contact information as a paid lead that is sold to one or more lenders in real time.
The rates shown are often "best available" or "as low as" figures that apply only to a narrow subset of borrowers with perfect credit, maximum down payments, and standard income. The site has no obligation to find you the best rate — only to connect you with a paying partner.
This does not mean rate comparison sites are useless. They are excellent for research and benchmarking what rates look like in the market. Just don't confuse browsing rates with getting an actual mortgage.
When to Use Each Channel
Use a Mortgage Broker when...
You want the market's best rate. You are self-employed, a newcomer, have bruised credit, or have a complex income situation. You are renewing and want to compare your existing lender against the market. You don't want to deal with multiple lenders yourself. This should be the default choice for most Canadians.
Use Your Bank Directly when...
You have an existing relationship with significant assets held there and can negotiate a meaningful rate discount. You value a single point of contact for all your banking. Your file is simple, your income is T4, and you've already benchmarked the bank's offer against broker rates and they're competitive. Some banks will match broker rates for existing clients.
Use a Digital Lender when...
You are tech-comfortable and want an all-digital experience. Your file is straightforward: T4 employment, good credit score (700+), standard property. You have compared their rate against broker offerings and they are genuinely competitive. Some digital lenders have very sharp rates for low-risk files but limited flexibility for complex situations.
Use Rate Comparison Sites when...
You are in early research mode and want to understand the rate landscape. You want to verify whether a quote you received is competitive. Do not enter your SIN, employment details, or full financial information on these sites. Use them to benchmark, then work with a licensed broker to actually get your mortgage.
8 Questions to Ask Any Lender or Broker
Before you sign anything or share your personal information, ask these questions:
- Are you a licensed mortgage broker or a bank employee? — The answer determines whose interest they are legally required to serve.
- How many lenders do you have access to? — A broker with 5 lenders is very different from one with 50.
- How are you compensated? — Ask for the finder's fee amount and which lender pays it. Transparency here is a good sign.
- Is there a broker fee? — Standard A deals should have no fee to the borrower. B-lender or private deals may have a fee; ask for the exact amount upfront.
- What lenders will you submit my file to? — You should approve each credit inquiry. Multiple hard pulls can affect your credit score.
- What are the prepayment privileges? — The rate is only part of the story. A mortgage with a 10% prepayment privilege is meaningfully more flexible than one with 5%.
- What is the penalty to break this mortgage early? — IRD penalties at big banks can be ten times larger than at monoline lenders for the same mortgage. Ask for an example calculation.
- Is this a collateral or conventional charge? — Collateral charge mortgages (common at TD, Scotiabank, National Bank) cannot be simply transferred to another lender at renewal without legal costs.
Frequently Asked Questions
Do mortgage brokers charge a fee?
For standard residential mortgages with A-lenders (banks, monolines, credit unions), no — the broker is paid a finder's fee by the lender, typically 0.5–1.2% of the mortgage amount. This fee is paid by the lender and does not come out of your pocket or increase your rate. For B-lender mortgages (for borrowers with lower credit or complex income), a broker fee charged to the borrower is common and should be disclosed upfront in writing.
Will using a broker hurt my credit score?
A broker consolidates your file and submits it to multiple lenders with a single credit pull (or minimal additional pulls). Because the credit bureaus treat mortgage-related inquiries within a 14–45 day window as a single event for scoring purposes, using a broker to shop multiple lenders has minimal credit impact — typically the same as going directly to one bank. Avoid submitting separate applications to multiple lenders on your own; that is what creates meaningful credit score damage.
Can I get a better rate going directly to my bank?
Occasionally, yes — especially if you have a deep relationship with significant assets held there. Banks do have discretion to discount rates for valued customers. However, studies consistently show that broker clients get rates that are, on average, 15–30 basis points lower than posted bank rates for comparable mortgage profiles. The key is to always benchmark. Get a broker rate, then see if your bank will match or beat it. You can then take the better of the two.
Are digital lenders regulated the same way as banks?
It depends on the lender's structure. Some digital lenders are federally regulated banks (subject to OSFI oversight and CDIC deposit insurance). Others are provincially regulated or operate as mortgage investment corporations. All must comply with provincial mortgage lending legislation and OSFI's B-20 stress test guidelines if they want to sell insured mortgages. Ask any digital lender specifically who regulates them and whether your deposits (if any) are CDIC-insured.
Work With a Licensed Broker — No Fee for Standard Mortgages
We compare multiple lenders across Canada. Your data goes only to lenders you approve.
Start Your Application →AI-assisted content. This page was produced with AI assistance and reviewed for general accuracy. It is for informational purposes only and does not constitute financial, mortgage, or legal advice. Always consult a licensed mortgage professional before making any financial decisions.