Mortgage Broker Vs Bank: Which Gets You The Lower Rate?
A mortgage broker can price your file with several lenders, while a bank branch prices it with one. As of late October 2026, borrower-reported broker quotes on this board include 4.34% on a three-year fixed and 4.59% at National Bank, while bank renewal letters on three-year fixed show 4.40% to 4.89%. Status, term and date differ, so compare like with like.
The answer is not always the broker. It depends on the file, the lender's own offer and what the bank already knows about you. What follows is how each side works, what the board shows, and the questions that settle it.
What A Mortgage Broker Does
A broker takes your application, collects documents, sends the file to lenders that suit it, and brings back offers. Banks, monolines, credit unions and other lenders can sit on the broker's list. The broker then explains the terms, helps you pick, and submits the file to the chosen lender, who underwrites and funds the loan. The broker does not lend the money. A mortgage broker is licensed in the province they work in, and the regulators include FSRA in Ontario, BCFSA in British Columbia, RECA in Alberta, AMF in Quebec and FCNB in New Brunswick, with equivalents elsewhere.
A bank branch does the same job with one lender's products only. That is not a flaw in itself. It means the comparison shopping falls on you, and the only rate sheet in the room is that bank's.
How A Mortgage Broker Gets Paid
On most residential mortgages, the lender pays the broker a finder's fee when the loan funds. The amount is commonly about 0.5% to 1.1% of the loan and varies by lender and product. Some lenders add small trailer fees. The borrower usually pays nothing on a standard prime mortgage. Fees can apply on private lending or a complex file, and they must be disclosed in writing before you commit.
This structure has an honest tension. Because compensation varies by lender, a broker could be nudged toward the lender that pays more. The protections are the provincial rules and your own habit of asking for several offers on paper. The question that exposes it is simple: ask for the best rate and the second-best rate, and what each pays the broker. A good answer is clear and quick.
What The Board Shows: Broker Quotes And Bank Letters
These rows are public comments, not advertisements. They are not like-for-like, because some are renewals, some are purchases, and insured status is not always given. They show the range.
| Source | Product | Rate | Detail | Date |
|---|---|---|---|---|
| Broker, B2B | 3-year fixed | 4.34% | Rate sheet Oct 21 | Oct 27 |
| Broker, B2B | 5-year fixed | 4.54% | Rate sheet Oct 21 | Oct 27 |
| Broker, National Bank | 3-year fixed | 4.59% | Broker offer | Oct 28 |
| Broker, lender not named | 3-year fixed hold | 4.14% | Broker quoted a hold | Oct 26 |
| Broker, monoline | 3-year variable | 3.85% | Quoted against 4.45% prime | Oct 28 |
| Bank letter, TD | 3-year fixed renewal | 4.89% | Renewal offer | Oct 28 |
| Bank letter, BMO | 3-year fixed renewal, insured | 4.54% | Renewal offer | Oct 13 |
| Bank letter, RBC | 3-year fixed renewal | 4.40% | Renewal offer | Oct 23 |
| Bank, RBC | 3-year fixed, just offered | 4.44% | Reported by the borrower | Oct 28 |
Read it honestly. The lowest rows are broker quotes, but one bank letter, RBC at 4.40%, sits right beside them, reported in a thread about room to negotiate. The highest row, TD at 4.89%, is also a bank. The pattern is not that brokers always win. It is that a first offer from any single lender tends to be higher than the best rate that lender, or another, will write after the file is compared.
Most variable rows on the board were quoted against the old 4.45% prime. Prime became 4.70% on October 29, so a prime minus 1.10 row at 3.35% is about 3.60% once the same discount sits on the new prime. The discount stays, the rate moves 0.25.
What A Bank Is Good For
A bank can be the better choice, and it is worth saying so. If you hold your chequing, savings and credit cards with the same bank, some relationship pricing may apply, and a retention team can reprice a renewal to keep you. If you have an existing product with that bank, such as a home equity line of credit, keeping everything with one lender may be simpler, and moving may mean discharging both. A straight renewal with your own lender also avoids paperwork, and the rate can be competitive if you push.
It also helps to remember that banks are lenders on a broker's list too. A broker can bring you back to the same bank at a different rate sheet. The comparison is therefore not bank against broker but one rate sheet against several. For a renewal, the mortgage renewal rates page sets bank letters against advertised rates in detail.
Where A Broker Tends To Help
A broker tends to be most useful when your file is not the standard shape. Self-employed income, a smaller down payment, a recent move, a rental property or a credit issue all narrow the field, and a broker knows which lenders bend and which do not. A broker is also useful when you simply want several quotes without applying at five branches, and when you want a variable rate from a monoline that has no branches at all. Pre-approval is one place where this pays: see the guide to mortgage pre-approval for how the rate hold works.
What Happens After You Pick An Offer
With a broker, the file goes to the chosen lender for underwriting. The lender reviews income, credit, the property and the down payment, and issues conditions, which the broker usually collects from you. A commitment letter follows, then a lawyer or notary handles closing, as with any mortgage. The rate you were quoted stands for as long as the hold lasts, commonly 90 to 120 days on a pre-approval. If you go through the bank, the same steps happen inside the bank with one underwriter pool and one rate sheet.
The loan itself is the same product either way. A five-year fixed from a lender is a five-year fixed from that lender, whether a broker or a branch delivered the file, though the rate and some terms can differ by channel. The prepayment clause, the portability rule and the renewal terms are in the mortgage contract, so read them before you accept.
Why Both Answers Can Be Right
The board cannot settle the question for you because the rows are not matched. A bank letter at 4.40% for one borrower and a broker quote at 4.59% for another say nothing about which channel is cheaper for you. What the rows do show is a spread of about three quarters of a point on three-year fixed money in late October 2026, from 4.14% to 4.89%, and a spread that wide is worth a few phone calls. The cheapest number you can hold in writing from any channel is the one to compare, and a lender that matches it removes the reason to move.
Questions To Ask Any Broker
| Question | Why it matters |
|---|---|
| Are you licensed in my province, and what is the licence number? | Brokers must be licensed in the province where they work |
| Which lenders will you send my file to, and why those? | Shows whether the shortlist fits the file |
| What is the best rate and the second-best rate, and what does each pay you? | Exposes compensation differences |
| Is there any fee to me, and is it in writing? | The borrower usually pays nothing on a standard prime file, and any fee must be disclosed in writing |
| What is the prepayment penalty method on each option? | The cheapest rate may carry a higher cost to leave. See the mortgage penalty calculator |
| How long does the quoted rate hold? | Rate holds are commonly 90 to 120 days, but each lender differs |
Next Step
If you already have a letter or a branch offer, bring it as the number to beat. Request cheaper rates and ask a licensed mortgage broker to price your file against it, naming the term, the insured status, and whether you want a fixed or variable. You decide what to sign. The broker's job is to give you something concrete to compare, and the questions above are how you check it. The fixed or variable guide covers the product question once the quotes are in.
Questions
How does a mortgage broker get paid?
Usually the lender pays a finder's fee at funding, commonly about 0.5% to 1.1% of the loan, depending on the lender and product. The borrower normally pays nothing on a standard prime mortgage, and any fee must be disclosed in writing before commitment.
Is a mortgage broker cheaper than a bank?
Not always. Reported broker quotes on the board are among the lowest, but RBC's 4.40% renewal letter sits next to them. The difference is that a broker compares several lenders, while a branch quotes one.
Who regulates mortgage brokers in Canada?
Provincial regulators: FSRA in Ontario, BCFSA in British Columbia, RECA in Alberta, AMF in Quebec, FCNB in New Brunswick, and equivalents elsewhere. A broker must be licensed in the province where they work.
When is staying with my bank fine?
When your bank's written offer is close to the best you can get elsewhere, when relationship pricing applies, or when you have linked products such as a credit line that make moving more complicated.