Mortgage Brokers vs Banks: Which Is Better?

Compare bank mortgages vs mortgage broker options in Canada. Learn about rates, service, pre-approvals, and why brokers shop your file to dozens of lenders.

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Mortgage Brokers vs Banks: Which Is Better?

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If you’re trying to figure out where to get your mortgage, you’re probably wondering: should I go to my bank or use a mortgage broker?

Let’s break down the real differences. This isn’t about making one side look better than the other. It’s about helping you make the right choice for your situation. If you’re considering a mortgage career, discover What Makes a Great Mortgage Brokerage to Work For in Canada.

Customer Service: Who Treats You Better?

Here’s something interesting: banks actually have better customer service training than mortgage brokerages. They teach their employees specific words to use, how to avoid upsetting customers, and how to communicate properly.

But here’s the catch – training doesn’t always equal results.

Bank employees who work regular nine-to-five jobs and get paid salaries don’t always have the same motivation as someone working on commission. When your income depends on keeping clients happy, you tend to work harder at it.

Mortgage brokers work on commission. If they don’t take care of you, they don’t get paid. It’s that simple.

The truth? You’ll find good and bad service in both places. People with terrible customer service usually don’t last long in either industry.

When Can They Actually Help You?

This is where brokers pull ahead.

Bank branches have set hours. Most staff work nine-to-five or maybe eleven-to-seven when they stay open late. If you need something outside those hours, you’re stuck waiting.

Mortgage brokers make their own schedules. Need an answer by 10 PM? They can do that. Want to meet on Saturday? Not a problem.

We get lots of customers who left their banks because they couldn’t get a meeting for two days, or were told their approval would take a week. That’s just how branch banking works.

How Fast Can They Process Your Application?

Banks can be painfully slow. During busy summer months, some applications take two to three weeks to review – even when you only have five days to remove your financing condition.

The problem? Bank employees are stuck with their one lender. If that lender is swamped, there’s nothing they can do about it.

Brokers know which lenders are fast and which are slow. When you’re in a rush, they can pick a lender that will turn things around quickly. They’re not stuck with just one option.

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Pre-Approvals: Are They Actually Worth Anything?

Bank pre-approvals often create false hope.

Most bank pre-approvals work like this: someone punches your Stated Income into a calculator and gives you a number. They don’t verify anything. They don’t check your actual documents.

This becomes dangerous when you’re making cash offers without financing conditions. You think you’re approved, but you’re really not.

Good brokers do full underwrite approvals, not just rate holds. They collect your income documents upfront, run all the numbers completely, and sometimes even submit your application to a lender to get written approval.

Why does this matter? Because what you think your income is and what actually qualifies are often two different things. You might count a one-time car allowance as regular income, or include bonuses that lenders won’t consider.

Lenders want consistent, predictable income. For variable income, they typically want a two-year history. They won’t count something just because it shows up on your tax return once. Understanding Mortgage Documents: What Your Broker Needs can speed up the process significantly.

If you want a full underwrite pre-approval instead of the basic rate hold most banks offer, book a free strategy call with LendCity and we will verify your actual qualifying numbers upfront.

Rates: Who Gives You a Better Deal?

Here’s the straightforward answer: brokers have better rates about 80-100% of the time.

Banks have higher overhead. They maintain branches, pay more staff, and have bigger infrastructure costs. This means higher rates for you. In fact, going direct to your bank could cost you millions over the life of your portfolio.

There’s one exception: if you’ve been with a bank forever, have all your accounts there, and your family banks there too, they might give you an exceptional rate to keep you. But this is rare. It’s not the normal situation.

Brokers can shop among dozens of lenders to find you the best rate and help you save $45K on your mortgage. They work with banks, credit unions, and monoline lenders (companies that only do mortgages and have lower costs). Explore Residential Mortgage Financing to see the full range of what’s available.

Options: What If You Don’t Fit the Standard Box?

Banks are mostly set up for people with good credit, stable jobs, and traditional income. If you fit that profile, great.

Some banks have alternative channels – basically their own mini brokerage. But these only have access to a handful of lenders, require at least 20% down, and often can’t approve applications because of their limited options.

Brokers have access to:

All the major banks
Credit unions with different policies
B lenders for people with credit challenges
Private lenders for tough situations
Mortgage Investment Corporations with better rates than traditional private lending

If you have bruised credit or a non-traditional situation, brokers have way more tools to help you. They can even assist with niche products like mortgages on agricultural zoned property.

The Exception Advantage

Here’s where banks have a secret weapon: exceptions.

Let’s say you want to buy a rooming house, but the bank’s policy says no rooming houses. If you’re a valuable client with lots of money at that bank, they might make an exception just to keep you happy.

When a broker asks that same lender for an exception, the answer is usually no. The relationship matters.

So if you’re in a really unique situation and you’ve been a loyal bank customer for years, try your bank first. If they say no, then go to a broker to find other solutions.

Wondering if B lenders, private lenders, or monoline lenders could give you better options than your bank? Book a free strategy call with us and we will shop your file across dozens of lenders at no cost to you.

Fees: Who’s Going to Charge You What?

This is where things get messy.

Banks don’t charge fees for regular mortgages. They do charge fees if you need their alternative lending options.

For brokers, here’s the deal: if you’re getting a regular mortgage from an A lender, you shouldn’t be charged a fee. The lender pays the broker. There’s no reason to charge you too.

But some brokers do charge fees even for regular mortgages. This is wrong. If a broker tries to charge you a fee for a standard mortgage, go find another broker. Get a second opinion.

These fee-charging practices have given the whole industry a bad name. Most brokers don’t do this, but the ones who do make everyone look bad.

For B lending or private lending, fees are normal. The lender charges a fee, and sometimes the broker does too, depending on how complex your situation is and how much work is involved.

So Which Should You Choose?

Go to your bank if:

You have all your accounts there and have been a loyal customer for years
You need an exception to standard lending rules
Your family has deep relationships with that bank

Go to a broker if:

You want the best rate (this is most people)
You need flexibility and availability outside business hours
You want faster processing
Your situation doesn’t fit the standard mold
You have credit challenges
You want access to all your options, not just one lender

The key is understanding what you need and picking the option that fits your specific situation.

Book Your Strategy Call

Frequently Asked Questions

Do mortgage brokers really get better rates than banks?

Yes, in about 80-100% of cases. Brokers can shop among dozens of lenders including banks, credit unions, and monoline lenders to find you the best rate. Banks only offer their own rates. The exception is if you're a long-term bank customer with all your accounts there – they might give you a special rate to keep your business.

Should I pay a fee to a mortgage broker?

Not for a regular mortgage. If you're getting approved through a standard A lender, the lender pays the broker and you shouldn't be charged. If a broker wants to charge you a fee for a regular mortgage, get a second opinion from another broker. Fees are normal for B lending or private lending.

How is a broker's pre-approval different from a bank's?

Bank pre-approvals are often just rate holds based on what you tell them your income is – they don't verify anything upfront. Good brokers collect your income documents, verify what you actually qualify for, and sometimes submit your application to get written approval. This gives you real certainty about what you can afford.

Can mortgage brokers work evenings and weekends?

Yes. Brokers make their own schedules and can meet with you when you need them, including evenings and weekends. Bank branch staff work set hours, usually nine-to-five, which can make it hard to get help when you need it.

What if I have bad credit – can a broker help?

Yes. Brokers have access to B lenders, private lenders, and Mortgage Investment Corporations that work with people who have credit challenges. Banks mostly only do prime lending and have very limited options if your credit isn't perfect.

When should I use my bank instead of a broker?

Use your bank if you've been a loyal customer for years with all your accounts there and you need an exception to their standard rules. Banks will sometimes bend their policies for valued customers. If you're buying something unusual and you have a strong relationship with your bank, try them first.

How fast can a broker get my mortgage approved?

Brokers can be much faster because they know which lenders have quick turnaround times and can choose accordingly. Banks can take two to three weeks during busy periods, and if you're working with a bank employee, they're stuck with that timeline. Brokers can switch to a faster lender if needed.

Do all brokers have access to the same lenders?

Most established brokers have access to major banks, credit unions, B lenders, and private lenders. The big advantage is having multiple options instead of being stuck with just one lender like you are at a bank. This means more solutions for different situations.

Disclaimer: LendCity Mortgages is a licensed mortgage brokerage, and our team includes experienced real estate investors. While we are qualified to provide mortgage-related guidance, the broader financial, tax, and legal information in this article is provided for educational purposes only and does not constitute financial planning, tax, or legal advice. For matters outside mortgage financing, we recommend consulting a Chartered Professional Accountant (CPA), licensed financial planner, or qualified legal advisor.

Written by

LendCity

Published

December 22, 2025

Reading Time

8 min read

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