Finding a suitable and affordable mortgage is pretty tough if you don’t know where to look, especially in Canadian cities such as Toronto and Vancouver, where housing costs are through the roof.
If you’re struggling to find an affordable mortgage, your search may go easier if you hire a mortgage broker, as working with one can come with some serious advantages.
What Is A Mortgage Broker?
A mortgage broker is a housing market professional who works for a mortgage brokerage. To become a certified broker, one of these specialists needs to go through a training program and obtain a license from their provincial or territorial government.
Most mortgage brokers have an extensive network of home financing providers that they do business with, such as banks, credit unions and alternative or private companies. In exchange for a percentage of the proceeds, otherwise called a commission, the broker helps these lending companies fish for new clients.
Watch Lendmore Financial’s Dave Johnson explain the benefits of using a mortgage broker.
Where Can I Find The Best Mortgage Brokerage Near Me?
| # of Lending Partners | Provinces Available | Learn More | |
| nesto | Not specified | All | Learn More |
| Mortgage Maestro | 50+ | British Columbia, Alberta & Ontario | Learn More |
| Homewise | 30+ | Ontario | Learn More |
| Morgix | 100+ | All |
nesto
nesto is an online lending platform that provides Canadians with a digital loan application and approval process. The company has around 300 brokers who work on behalf of clients to find the best loan products and rates from top-rated lenders in Canada.
nesto’s brokers work on a commission-free basis and are paid a salary instead. As such, they never push any products on Canadians.
Since nesto is an online-only mortgage brokerage, there are no physical offices. Instead, the mortgage process takes place entirely online. The website features a handful of handy tools to help borrowers determine how much house they can afford and how much their mortgage payment will be.
Currently, nesto offers mortgage rates starting at 5.34% for a 5-year fixed term and 5.95% for a 5-year variable term.
Where Can You Apply With nesto?
nesto is an online platform, you can apply online from anywhere in Canada. While they do have an office in Montreal at 2200 Stanley St 1er étage, Montreal, Quebec H3A 1R6, service is not available onsite.
Mortgage Maestro
Mortgage Maestro is an online-only lender dedicated to streamlining the mortgage application and approval process. The company has more than 50 trusted lenders within its network to help clients find the right mortgage products at the lowest rates.
Mortgage Maestro offers purchase mortgages, mortgage renewals, refinancing and reverse mortgages. Mortgage Maestro’s interest rates start as low as 5.69%(conditions apply).
Where Can Apply With Mortgage Maestro?
While Mortgage Maestro has a main office located at #330-10524 King George Boulevard, Surrey, BC V3T 2X2, it’s not available for onsite visits. Mortgage applications can be completed completely online. However, you must be a British Columbia, Alberta or Ontario resident to be eligible.
Homewise
Homewise is a digital mortgage platform that helps Canadians quickly find and compare lenders and loan products from more than 30 lenders and banks within its network. They currently offer new mortgages, refinancing options and reverse mortgages.
The company will help you find the right lender and negotiate on your behalf to help you get the best deal. In fact, Homewise claims to help consumers save an average of over $10,000.
Once you narrow down on the lender, Homewise will assign a dedicated expert to work with you and the lender to finalize your mortgage.
Where Can Apply With Homewise?
Like the other mortgage brokerages, Homewise Mortgages has a physical office in Ontario (609 Marlee Ave North York, ON M6B 3J6), but it does not offer onsite services. Instead, residents of Ontario can apply online and use their email or phone to contact them for additional information.
Morgix
Morgix is based out of Newmarket, Ontario and provides loan products to borrowers of all credit types, including those with bad credit. The brokerage has a team of brokers and is partnered with over 100 lenders to help clients get the best loan deals.
The loan application and approval process is very quick, so you don’t have to wait weeks for an answer. Morgix offers the following loan products:
- Purchase mortgages
- Second mortgages
- Debt consolidation loans
- Refinancing
- Home equity loans
- Pre-paid equity loans
Where Can Apply With Morgix?
You can apply for a loan with Morgix online, or visit the broker’s Newmarket office at the following address: 202-18075 Leslie Street Newmarket, ON, L3Y 9A4.
How Can A Mortgage Broker Help You?
A mortgage broker has multiple duties and tasks to perform day-to-day. Here are some things they will help you with.
Help With The Mortgage Application Process
They will assist clients with the pre-approval and mortgage application process. Your broker will guide you through the pre-approval process and help you submit your application. They’ll also explain any costs, terms and conditions prior to finalizing your mortgage.
Negotiate Deals
A mortgage broker’s job is to connect you with a mortgage provider and financing program that suits your particular financial and personal preferences. So, they will negotiate (broker) deals with multiple mortgage providers for you.
Connect You With Specialty Lenders
If you have bad credit, many prime lenders will deny your application or charge you a higher interest rate because you’re considered a riskier client. The same goes for people with low or inconsistent incomes. Luckily, a mortgage broker can connect you with providers who work specifically with high-risk clients.
Special Deals
Many mortgage brokers have exclusive deals with different mortgage providers. So they may be able to offer lower interest rates to make mortgage deals more appealing. Some mortgage brokers snag clients by negotiating with mortgage providers for better interest rates. So, unlike a traditional lender, who can only offer their rates, a mortgage broker can look all over the country and find you a home financing rate that’s actually affordable.
How Much Do Mortgage Brokers Cost?
Working with a mortgage broker comes with several perks, all of which come at no cost to you. Most mortgage brokers do not charge borrowers a fee for their services. Instead, they are typically paid by commission through the lenders. However, for private and B lenders, borrowers usually pay a finders fee to the broker.
Once you sign a loan contract, the lender will pay the mortgage broker a commission in exchange for the reference. Broker commissions usually range from 0.5% to 1.2% of the mortgage amount.
In some cases, mortgage brokers may charge a fee to subprime borrowers who are unable to get approved for a mortgage with a conventional lender. There may be a little more legwork involved in this situation, and to compensate, the broker may charge a fee of up to 2% of the mortgage amount. If this is the case, the broker will be upfront about the fees so you know what you’re paying before you sign a loan contract.
Mortgage Brokers vs. Banks
One of the best things about mortgage brokers is that they can connect you with multiple mortgage lenders and rates. This will allow you to compare multiple offers and choose one that best meets your needs. On the other hand, traditional mortgage lenders, like banks, can only offer you their specific products and rates.
| Bank | Mortgage Broker | |
| Description | Licensed banking company offering a range of financial products (loans, accounts, credit cards, mortgages, etc.) | Licensed mortgage professional, partnered with numerous lenders. Paid a commission by the lender for brokering mortgage deals |
| Credit Lending | Yes | No |
| Application Assistance | Yes | Yes |
| Popular Examples | BMO, TD, RBC, Scotiabank, CIBC, Tangerine, EQ Bank | Homewise, Mortgage Maestro, Morgix, Nesto |
| Pros | Becoming a client can help you access preferred deals. | The ability to negotiate with multiple lenders for the best interest rates, mortgage plans and volume discounts |
| Cons | Can only offer their products and rates, which may be higher than other lenders. Plus, you have to broker the deal alone. | Not all mortgage providers work with mortgage brokers. |
Advantages And Disadvantages Of Using A Mortgage Broker
Hiring a mortgage broker can be the best option to find the mortgage you’re looking for, nonetheless, there are several important drawbacks to consider when working with a mortgage broker.
Advantages Of Using A Mortgage Broker
- Their Services Are Often Free – Generally speaking, most mortgage brokers get paid by the lenders they find clients for, rather than the clients themselves.
- They Do Most Of The Work For You – A good broker can make the mortgage application, pre-approval and finalization process much less stressful overall.
- Access To Better Mortgage Deals – Since mortgage brokers partner with many lenders, you can view multiple rates and payment plans to find the deal for you.
- Access To More Lenders – If one lender denies you because of bad credit or lack of a full-time income, a mortgage broker can help you find another.
- They Work Independently – Mortgage brokers don’t really care which lender you pick, as long as they can find you the best deal and confirm you as a client.
- They May Get Your Fees Waived – Some brokers will ask lenders to waive certain mortgage fees (origination, appraisal, etc.), which are otherwise pricey.
Disadvantages Of Using A Mortgage Broker
- They May Not Be As Familiar – Applying for a mortgage with your bank is often easier and more comfortable than it is through an unfamiliar person or business.
- They May Not Have Access To All Lenders – While some mortgage brokers have large networks of lenders, they may still not have access to certain lenders you want to be considered for. For example, certain banks such as RBC and CIBC are not available through broker channels.
- They Might Not Have Your Best Interests In Mind – Some mortgage brokers just want to get your business, so they may direct you to lenders who provide them with higher commissions rather than those who will be a good match.
- Extra Documents May Be Required – Although they’re supposed to make the process easier, some brokers ask for more paperwork than traditional lenders.
- Some Brokers Aren’t Free – Many mortgage brokers charge their clients fees. If not, they may direct you to pricier loans in exchange for payments from lenders. Moreover, in some cases, the fee isn’t paid through you directly but to the lender in the form of a loan origination fee.
- Not All Estimates Are Guaranteed – Sadly, the initial mortgage quote your broker provides may not be the true final price that the lender gives you.
Should You Work With A Mortgage Broker?
Mortgage brokers offer a wide range of benefits and are a good option for Canadians who want guidance when looking for a mortgage. Brokers will not only find the lowest rates and best mortgage options, but they can offer expert advice and take some of the stress off your shoulders. Whether you are a first-time home buyer or looking to upgrade to a bigger house, a mortgage broker can be a great solution.
