Mortgage Broker vs. Bank: What Actually Changes for You

People ask me this constantly, usually phrased as “is a broker cheaper?” That is the wrong question, and answering it honestly means admitting a broker is not always the right choice.

Here is the actual difference.

A bank sells you its own product. A broker shops yours.

When you walk into a bank, the loan officer works for that bank. They have one set of guidelines and one price sheet. If your file fits, you get a loan. If it does not fit — if you are self-employed, or the property is unusual, or your credit has a story attached — they decline you, and that is the end of it. They are not permitted to send you elsewhere.

A broker is not employed by a lender. I place loans with many of them. When your file comes in, I price it across lenders and see which one wants it most, because lenders genuinely differ in what they want. One is aggressive on high credit scores this month. Another is the only one that will look at twelve months of bank statements instead of tax returns. A third has the best pricing on investment property.

Same borrower, same file, different answers.

The part that costs people the most money

The declined file is not the expensive problem. The expensive problem is the approved file that could have been better.

A bank approves you at their price. You have nothing to compare it to, so it seems fine. You never find out that another lender would have priced the same file better, or waived the mortgage insurance structure that is costing you an extra amount every month, or not charged you for something a competitor absorbs.

That gap does not show up on your statement. It shows up as money you never knew you could have kept.

Where a bank actually wins

I would rather you hear this from me than discover it later.

Existing relationship pricing. Some banks discount meaningfully for customers with substantial deposits or investments with them. If you have a large relationship at a bank, ask what it is worth. Sometimes it beats anything I can find.

Portfolio loans on genuinely odd properties. A bank keeping a loan on its own books can make an exception no wholesale lender will. Unusual acreage, mixed-use, a property with a title quirk — occasionally a local bank is the only institution that will do it.

You want one company for everything. Some people simply prefer their mortgage, chequing and savings under one roof. That is a legitimate preference and I am not going to argue you out of it.

What it costs you to use a broker

Nothing extra, in the ordinary case. Broker compensation is disclosed on your loan estimate and is either paid by the lender or by you, and it is competitive with what a bank builds into its own pricing — a bank simply does not itemise it the way I am required to.

The thing to compare is not the fee line. It is the total cost: rate, points, lender fees and mortgage insurance, over the number of years you will actually keep the loan. That is the comparison I will run for you, and it is the one you should demand from anybody quoting you a mortgage.

The question worth asking instead

Not “broker or bank?” but: “How many lenders did you check, and can I see the comparison?”

A bank can only answer “one.” If a broker cannot show you the comparison either, you are not getting the benefit you came for.

If you want to see what that looks like for your situation, start here — it takes about two minutes, does not touch your credit, and I read every one of them myself. Or just call me and describe it.