Is a Mortgage Broker Worth It in Canada?

The reason most Canadians never use a mortgage broker is a reasonable assumption that turns out to be wrong: that the broker takes a cut of your money. On a standard residential mortgage with a prime "A" lender — a purchase, a refinance, or a renewal — using a broker costs the borrower nothing. The lender pays the broker a commission of roughly 0.75% to 1.20% of the mortgage amount out of its own margin.

That commission is not added to your rate. It replaces the cost the lender would otherwise spend on branches, staff, and advertising to find you. Which is why the broker channel frequently prices better than the branch channel rather than worse.

The typical gap is 0.10% to 0.30% below what a branch offers on the same mortgage. On a $500,000 mortgage over a five-year term, that is roughly $5,000 to $15,000 in interest. The reason is competition: a bank employee can only sell you their bank's products, while a broker can put your file in front of 30 to 50 lenders and let them compete. Brokers also have access to volume-discount pricing that individual walk-in customers do not.

The value goes up sharply if your file is anything other than textbook. Self-employed income, commission income, a recent move to Canada, a bruised credit history, a rental property, or an unusual property type are all situations where one lender says no and another says yes at a normal rate. A branch that declines you has nowhere else to send you. A broker just moves to the next lender.

The 2024 rule change made brokers more useful at renewal specifically. Since November 2024, a straight switch to a new lender at renewal — same balance, same or shorter amortization — no longer requires requalifying under the federal stress test. Before that change, many borrowers were effectively trapped with their existing lender. Now shopping your renewal is genuinely open to almost everyone, and a broker does that shopping in one conversation.

The situations where you do pay a fee are B-lenders and private mortgages, where fees typically run 1% to 4% of the loan. These come into play when no prime lender will approve you. Provincial regulators require the fee to be disclosed to you in writing before you sign, so you will know. Not every broker works with prime lenders either — ask directly which lenders they are licensed with and how they are compensated on your specific file.