Mortgage Broker or Go Straight to the Bank? The Real Difference
Walk into a bank and you see one lender’s products. Use a broker and they shop dozens of lenders for you.
What’s the essential difference between using a mortgage broker and going to a bank?
A bank can offer only its own mortgage products and lending criteria; a mortgage broker is an independent professional who compares multiple lenders at once — major banks, credit unions, monolines, B-lenders, and private lenders. In Ontario, brokers are regulated by the Financial Services Regulatory Authority (FSRA) and are usually paid by the lender, not by you. In short: a bank gives you one lender’s options, a broker shops a whole pool for you.
Source: Financial Services Regulatory Authority of Ontario (FSRA, fsrao.ca); Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA)
Arranging a mortgage forces a choice: walk into the bank you already know, or use a mortgage broker? Many people default to the bank without realizing the two paths offer completely different ranges of options. This article explains exactly how a bank and a broker differ, who regulates brokers, who pays them, and when each path suits you best.
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The bank: you only see its own products
The broker: shopping multiple lenders on your behalf
Regulation: Ontario brokers are licensed under FSRA
ℹ️The rate is only one term — don’t compare on rate alone. Prepayment privileges, penalty math, and how the mortgage is registered (standard vs. collateral charge) heavily affect your real cost. Whether you use a bank or a broker, ask about all of them.
Who pays: usually the lender
How to choose: it depends on your situation
Neither is universally better. If you have a deep relationship with a bank, a standard situation, and you like its offer → going direct is convenient. If you want to compare in one shot, your situation is complex, or you want someone advocating for you → a broker’s multi-lender view adds value. Whichever path you take, verifying the FSRA licence and asking about terms beyond the rate (prepayment, penalties, how the charge is registered) is always a smart move.
Frequently Asked Questions
Does using a mortgage broker cost extra?
On a standard prime mortgage, the broker is usually paid by the lender, not by you. For non-standard or private lending the fee structure can differ, so ask directly up front.
Can a broker get a lower rate than a bank?
A broker can compare offers from multiple lenders at once and often finds competitive terms; whether it’s lower depends on your situation and the market at the time. The real value is the range of comparison and the advocacy, not a guaranteed number.
How do I confirm a mortgage broker is legitimate?
In Ontario, brokers and agents must be licensed with FSRA (under the MBLAA, 2006). You can check their licence and level — Level 1 works with traditional lenders, Level 2 and brokers can work with all lenders, including alternative and private ones.
My situation is straightforward — should I just go to the bank?
If you have a deep relationship with a bank, a standard profile, and you like the offer, going direct is convenient. Even so, one more source of comparison (even just to see the broker channel’s offer) is often worthwhile — and don’t forget to compare the terms beyond the rate.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
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