I am obviously not a neutral party here, so let me be useful rather than persuasive. There are situations where your bank is the right answer, and I will tell you when yours is one of them.
What is actually different
Your bank sells its own products. That is the entire menu, and the person across the desk is measured on how much of it they sell. It is not a criticism, it is just what the job is.
A broker or agent works with many lenders, banks among them, and gets paid by whichever one funds your mortgage. So the incentive is to place your file somewhere it will actually be approved on terms you will accept.
Cost
In most standard residential situations, working with an agent costs you nothing directly. The lender pays. Exceptions exist, mainly private lending and some credit-challenged files, and a good agent tells you about that in the first conversation rather than the last.
Credit checks
An agent pulls your credit once and uses that single pull with every lender they approach. Applying at three banks separately means three inquiries. The bureaus do treat mortgage shopping within a short window as one event, so the damage is smaller than people fear, but one pull is still cleaner than several.
The penalty question nobody asks
This is the one I wish more people knew before signing.
If you break a fixed mortgage early, the penalty is usually the greater of three months interest or the interest rate differential. The big banks generally calculate IRD using their posted rates rather than the rate you were given, and that method produces dramatically larger penalties. Many monoline lenders, the ones you only reach through a broker, calculate on your actual contract rate.
On a mid-size mortgage that difference can run to several thousand dollars. Around six in ten Canadians break their mortgage before the term ends, usually because life changed rather than because they planned to. So the penalty clause is not a footnote.
When your bank is genuinely the better choice
If you have a long relationship and real negotiating leverage, use it. Push them, and hold their offer up against what I can find, because a bank that knows you are shopping behaves differently.
If you need a package that ties your mortgage to a business account, investments, and daily banking, that has value a broker cannot replicate.
And at renewal, staying put avoids re-qualifying under the stress test. If your income has changed since you first qualified, that can matter more than a small rate difference.
Where a broker earns their keep
Self-employed income. Bruised or thin credit. Rural, waterfront, or unusual properties. A high debt load you want to consolidate. Anything a bank has already declined. In those files access to more lenders is not a marginal advantage, it is the difference between yes and no.
What to do with this
Get your bank’s best offer. Then let me look. If theirs is better, take it and I will tell you so. The comparison costs you nothing and you will sign knowing what you turned down.
Would it help to have something to measure your bank’s offer against?
General education, not financial advice. Figures are illustrative and subject to lender approval (O.A.C.). Lora Fenn, Mortgage Agent Level 1, Lic. #M25003153. Dominion Lending Centres YBM Group, FSRA #11129. 705-881-2780 · lfenn@dominionlending.ca
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