Choosing a Mortgage Provider – Banks vs Brokers

Having a professional looking out for your best interest while navigating the abundance of mortgage choices available today puts you at a huge advantage by ensuring you always have the mortgage that’s best suited to your unique needs and finances – regardless of whether you’re a first-time home buyer, upgrading to a new home or adding to your real estate investment portfolio. But how do you choose the best mortgage lender or provider?

The banks and other lenders work extra hard to try and convince mortgage borrowers that their branch employees or mobile mortgage specialists can provide the same products and services as licensed mortgage brokers. But, in reality, the two offerings are worlds apart.

Key Takeaways

• The number one differentiator between banks and mortgage brokers is that brokers offer more choice – with access to multiple product lines from a wide variety of lenders
• Mortgage brokers must be licensed and adhere to strict government rules and regulations, while bank employees are not required to be licensed
• Mortgage brokers know mortgages – it’s what they do every day. And they won’t try to sell you a bank account, investments or other products like often happens with bank employees

Choosing Between a Bank vs a Broker

The number one differentiator between banks and mortgage brokers is that mortgage brokers offer more choice. That’s because brokers have access to multiple product lines from a wide variety of lenders – including banks, credit unions, trust companies, private funders, etc. 

In contrast, bank branches and specialists can only offer you a mortgage from their one product line. More choice from brokers means you’ll be matched with the best product and rate catered to your unique financial situation. And if you happen to be self-employed or have credit blemishes, brokers can still help you. 

Mortgage brokers also get lenders competing for your business again at renewal – or anytime you need to renegotiate your mortgage – which can save you a lot of money throughout the years that you have a mortgage. 👆

Tip: Even when you work with a mortgage broker, your lender will often reach out to you at renewal time with a direct offer. Take that offer to your mortgage broker for a second opinion. In most cases, they’ll be able to get you a better deal.

Licensing 

Mortgage brokers must be licensed and adhere to strict government rules and regulations. And, in order to maintain the licence, they’re required to take continuing education and relicensing courses to ensure they’re best able to advise on your ideal mortgage solutions. Mortgage specialists aren’t licensed. They can start working for a bank and begin selling mortgages with zero financial training or experience.

Employees vs entrepreneurs

Another key distinction is that branch and mobile specialists are bank employees, whereby mortgage brokers are independent business owners. In other words, mortgage brokers are not biased, as they work for you, not a specific lender. ✋

Important: Using an unbiased provider is always a smart move – regardless of whether you’re getting a mortgage or using a contractor for home repair.

Specialization

As independent business professionals, mortgage brokers don’t have to adhere to quotas that would tempt them to push one product over another because there’s no personal stake in the outcome. 

Mortgage brokers know mortgages – it’s what they do every day. And they won’t try to sell you a bank account, investments or other products like often happens with bank employees. Brokers are focused on mortgages and stay up-to-date on available mortgage products and any new products, or changes to existing products or mortgage rules, so they can best advise you on offerings that match your specific needs. 

How nesto works

At nesto, it’s our mission to find you the very best mortgage rate upfront in the most simple, transparent, and fast way. Thanks to our advanced technology, we’re able to evaluate the whole market in seconds to find the most affordable mortgage while our commission-free experts provide you with unbiased support throughout the process.

Other articles in this guide: “Mortgage & Purchase Process in Canada”

• 6 Things You Need to be Preapproved for a Mortgage
• Home Inspection Fees & Services in Canada
• House Deposit vs Down Payment
• Mortgage Approval Process