Comparison · How lending works
Mortgage broker vs bank
The difference matters least when your file is straightforward and most when it is not — which is precisely when people find out.
What is the difference between a mortgage broker and a bank?
A bank lends its own money against one set of guidelines, so a file that does not fit is declined. A broker is independent and takes the same application to a wholesale marketplace of many lenders, each with different guidelines and pricing, then places it with whichever fits best.
| Mortgage broker | Bank or direct lender | |
|---|---|---|
| Lender options | Many wholesale lenders | One — its own |
| If your file does not fit | Moved to a lender that fits | Declined |
| Pricing | Wholesale, no branch overhead | Retail |
| Guideline variation | Used as leverage | Fixed |
| Niche products | DSCR, bank statement, non-warrantable condo | Rarely |
| Who you deal with | The same person throughout | Often a call centre |
| Makes the credit decision | No — the lender does | Yes |
A broker usually wins when
- You are self-employed or your income is complex.
- You have had a recent credit event.
- The property is a non-warrantable condo or unusual in some way.
- You already own several financed properties.
- You want more than one option priced before committing.
A bank can make sense when
- You have a long relationship and a genuine pricing concession attached to it.
- Your file is entirely straightforward and you value the existing relationship.
- You want deposits and mortgage under one roof for its own sake.
Worked through
The clearest way to see the difference: a bank can only tell you yes or no. A broker can tell you which lender says yes, at what price, and what would have to change for a cheaper one to say yes too. That third answer is the one that saves money.
Frequently asked
Do mortgage brokers charge more?
Not inherently. Brokers access wholesale pricing, which is set below the retail pricing a bank's own branch network requires. Broker compensation is disclosed on every loan estimate, so you can compare the total cost directly.
Is it harder to close with a broker?
No, and the reverse is often true — a broker can move a file to a different lender if the first one stalls, where a bank has nowhere to move it. Listing agents occasionally believe otherwise, which is worth addressing early with a strong pre-approval.
Does using a broker affect my credit differently?
No. One credit pull is used to shop multiple lenders, and mortgage inquiries within a short shopping window count as a single event for scoring purposes.
Programs mentioned
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Still not sure which applies to you?
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