Mortgage Broker vs Bank: Which Approach to Choose | Quebec

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Two Approaches to Getting a Mortgage

In Quebec, borrowers have two main options for obtaining a mortgage: going through a mortgage broker licensed by the Autorité des marchés financiers (AMF) or dealing directly with a financial institution such as a bank or credit union. Each approach has its strengths and limitations, and the best choice depends on your personal situation, the complexity of your file, and your priorities.

Advantages of a Mortgage Broker

Access to multiple lenders (typically 20 to 40) including banks, credit unions, trust companies, and alternative lenders, enabling a broad market comparison.
Service is generally free for the client in a standard residential loan; the broker is compensated by the lender.
Legal obligation to recommend the product best suited to the client's situation, under the Act respecting the distribution of financial products and services.
Expertise in complex files: self-employed workers, non-traditional income, imperfect credit, rental properties.
Considerable time savings: the broker shops for you and negotiates with lenders on your behalf.
Access to negotiated volume rates that are not always available directly at the branch.

Advantages of Going Directly to the Bank

Direct relationship with the lender: a single point of contact from application to disbursement, which can simplify communication.
Ability to negotiate an integrated service package (mortgage, account, credit card, investments, insurance) with cross-benefits.
Potential access to internal promotions or preferential rates reserved for the institution's existing clients.
In-depth knowledge of your financial history if you are a long-standing client, which can facilitate approval.
Some institutions offer exclusive perks such as cash back, discounts on other products, or loyalty programs.

Situations Where a Broker Is Particularly Recommended

First-time home purchase: The broker guides the buyer through the process, explains available programs (HBP/FHSA, CMHC loan insurance), and compares offers from multiple lenders to secure the best terms.
Self-employment or non-traditional income: Self-employed workers often need to go through special qualification programs. The broker knows each lender's policies and can direct the file to the one that best accepts this type of income.
Mortgage renewal: At renewal, the broker can have your current lender compete with other institutions. Many borrowers accept the renewal rate offered by their bank without negotiating, which can cost thousands of dollars.
Imperfect credit file: A broker with access to alternative and B lenders can find solutions for borrowers whose credit does not meet major bank criteria.

The Best Strategy: Compare Both

Nothing prevents you from consulting a mortgage broker and your bank simultaneously. This approach allows you to compare rates, terms, and the level of service offered by each channel. If you make your applications within a short period (14 to 45 days depending on the credit agency), multiple credit checks are generally grouped into a single inquiry, minimizing the impact on your score. Present one offer to the other to stimulate negotiation. Ultimately, choose the option that offers the best combination of rate, term flexibility, and quality of advisory service for your specific situation.

Frequently Asked Questions

Does the mortgage broker cost the client anything?

In the vast majority of residential transactions, the mortgage broker costs the client nothing. They are compensated by the lender through commissions, generally between 0.50% and 1.10% of the loan amount. Fees may apply in exceptional situations (private lending, very complex file), but the broker must disclose them in writing in advance.

Does the broker have access to the same rates as the bank?

Yes, and often to even more competitive rates. Brokers negotiate volume rates with lenders and have access to specialized lenders that the public cannot contact directly. However, some banks offer exclusive promotional rates to their existing clients that are not available through brokers.

When is it better to go directly to the bank?

Going directly to the bank can be advantageous if you already have an established relationship with your institution, if you want to negotiate an integrated service package (mortgage, investments, insurance, bank account), or if your bank offers an exclusive internal promotion not available through brokers.

Can I consult a broker AND my bank at the same time?

Absolutely. It is even recommended to compare both approaches. You can get an offer from your bank and ask a broker to compete with it. Be aware, however, that each credit application may generate a credit check. If checks are done within a short period (14 to 45 days), they are generally grouped into a single inquiry by credit agencies.

Is the broker truly independent or do they favour certain lenders?

The broker has a legal obligation under the Act respecting the distribution of financial products and services to recommend the product that best suits your situation. However, commissions may vary from one lender to another. An ethical broker will present you with several options and explain the differences. You can ask to see offers from multiple lenders to verify their impartiality.