Mortgage Broker or Bank? Where to Get Your Mortgage

You can get a mortgage straight from a bank or credit union, or through a mortgage broker who shops lenders for you. Here is how each route works in BC, how brokers are regulated and paid, and what to ask before you commit to a rate, a lender or a renewal.

The short version

Where you can get a mortgage

The Financial Consumer Agency of Canada (FCAC) lists banks, credit unions, mortgage companies, insurance companies, trust companies and loan companies among the lenders that offer mortgages. You can go one of three ways:

• A bank. Your own or another one. You deal with the lender directly, and it offers its own mortgages.
• A credit union. Also a direct lender with its own mortgages. In BC, credit unions are usually regulated by the Province through BCFSA rather than by the federal rules that cover banks.
• A mortgage broker. A go-between who compares lenders for you, which can include lenders that deal only through brokers.

How a mortgage broker works in BC

A broker doesn't lend you money. As FCAC puts it, brokers arrange transactions by finding a lender for you. Here is what the rules say as of August 2026:

• Registration. Under the Mortgage Brokers Act, a person can't carry on business as a mortgage broker, or as a submortgage broker working for one, without being registered, unless exempt. BCFSA warns that consumers who use unregistered brokers aren't protected by the Act. You can look up a broker on BCFSA's website.
• A new law. The Mortgage Services Act is scheduled to replace the Mortgage Brokers Act on October 13, 2026. Brokers will then be licensed instead of registered, with BCFSA overseeing the change.
• Pay. FCAC says brokers generally don't charge fees for their services and usually receive a commission from the lender when they arrange a mortgage. Ask how your broker is paid, and get any fee you would pay in writing before you sign. From October 13, 2026, rules under the new Act require brokers presenting you with mortgage options to disclose their expected pay, generally as a dollar amount.
• Disclosure. If a broker, or an associate or related party, has or may acquire a direct or indirect interest in your transaction, the Mortgage Brokers Act requires the broker to give you a signed, written disclosure statement.
• Reach. Brokers don't all have access to the same lenders, so ask which ones a broker works with.

How banks and credit unions work

A bank or credit union offers its own mortgages, often alongside its other products, such as a line of credit secured by your home.

• Many ways to apply. You can apply in a branch, by phone, online or through a mortgage specialist. Some banks also have mobile advisors; CIBC, for example, offers mortgage advice at a time and place convenient for you.
• One relationship. Your mortgage, accounts and line of credit can sit with one institution. FCAC notes you may be able to negotiate a lower rate with your lender.
• Federal protections. Federally regulated banks must offer and sell you products that are appropriate for you, and tell you if they've assessed that one isn't. A federally regulated lender must also send your renewal statement at least 21 days before your term ends.
• Credit unions. Because a BC credit union usually answers to the Province, some of those federal rules may not apply in the same way. Ask about the credit union's own renewal and qualifying rules.

Monoline lenders

Mortgage companies that lend only on mortgages are often called monoline lenders. Some work only through brokers, so you can't walk in and apply. Their terms can differ from a bank's in ways that matter later: prepayment privileges, portability and how a penalty is worked out if you break the mortgage. FCAC notes that the way a prepayment penalty is calculated varies from lender to lender, and that the penalty can cost thousands of dollars. Once your mortgage funds, you make payments to the lender and deal with it on prepayments and renewal offers, so read its terms as closely as you would a bank's.

Weighing your options

• A broker saves legwork. One conversation can cover several lenders, including some you can't approach on your own. The trade-off: you only see the lenders that broker deals with, and the broker is usually paid by the lender you choose.
• A bank or credit union keeps things under one roof. You can bundle accounts, meet in a branch and negotiate with an institution you already know. The trade-off: you only see that lender's products, so you have to gather other quotes yourself.
• Compare the whole offer. A slightly lower rate can cost you more if the prepayment privileges are tighter, the penalty is calculated less favourably or the mortgage can't move with you to your next home.

Rate holds

When you get pre-approved, which I cover in Why Mortgage Pre-Approval Matters, the lender usually holds a rate for you. FCAC says a pre-approval may lock in a rate for 60 to 130 days, depending on the lender. RBC, for example, advertises a 120-day rate hold, with the mortgage funded within 120 days of your application, and BMO guarantees a fixed rate for up to 130 days, after which the guarantee expires if the mortgage hasn't funded. Through a broker, the hold depends on the lender behind the offer. Ask:

• How long is the rate guaranteed? And does it cover the rate type and term you want?
• What if rates fall? Ask whether you automatically get a lower rate if rates drop before you close.
• Can it be extended? Useful if your purchase or completion date is months away.

Switching lenders at renewal

At the end of your term, you can move your mortgage without a prepayment penalty. I explain the timing in Renewing Your Mortgage. On the stress test:

• Uninsured mortgages. Since November 21, 2024, the Office of the Superintendent of Financial Institutions (OSFI) hasn't expected lenders to apply the minimum qualifying rate to a straight switch: a stand-alone mortgage (outside a combined plan with a line of credit) moved from one federally regulated lender to another at renewal, with no increase in the loan amount or the remaining amortization. Up to $3,000 can be added to cover costs such as fees, but you can't take equity out.
• Insured mortgages. Under the Canadian Mortgage Charter, insured mortgage holders can switch lenders at renewal without another stress test. Since December 16, 2024, the same has applied when a low-ratio mortgage (with at least 20% equity) moves from a federally regulated lender to any new lender that has it insured.
• Credit unions. The uninsured exemption covers moves between federally regulated lenders, so if you are moving to or from a BC credit union, ask how the new lender will qualify you.
• Costs. FCAC lists discharge, registration, transfer or assignment fees, an appraisal if needed and other administration fees, and suggests asking the new lender to pay some or all of them. If your mortgage is registered as a collateral charge, you must repay or transfer every loan it secures.

The new lender still has to approve your application, and it may use different criteria from your current lender.

Questions to ask a broker or a lender

• Which lenders do you work with? For a broker, ask too whether any of them is related to the brokerage.
• How are you paid? A commission from the lender, a fee from you, or both.
• What can I prepay each year? And how would the penalty be calculated if I broke the mortgage early?
• Can I take it with me if I move? Ask whether the mortgage is portable and what restrictions apply.
• How will it be registered? A standard charge secures only the mortgage, while a collateral charge can secure other loans and is harder to move to a new lender.
• What happens at renewal? How early you can renew without a charge, and how the lender will contact you.

Questions buyers often ask me

Does a mortgage broker cost anything in BC?

Usually not directly. FCAC says brokers generally don't charge fees and are usually paid a commission by the lender. If a fee would apply to your mortgage, ask for it in writing before you sign.

How do I check that a mortgage broker is registered or licensed?

Search for the broker on BCFSA's website. Brokers must be registered under the Mortgage Brokers Act until October 13, 2026, and licensed under the Mortgage Services Act from that date.

Will a broker always find a lower rate than my bank?

Not always. Lenders can have different rates and conditions for similar mortgages, and your own bank may negotiate, so compare written offers, including the terms, from both.

How long will a lender hold my rate?

FCAC says 60 to 130 days, depending on the lender. The mortgage generally has to fund within that window, or the guarantee expires.

Do I have to pass the stress test again if I switch lenders at renewal?

Generally not, if you move to another federally regulated lender without borrowing more or extending your amortization. Insured mortgages can also be switched at renewal without a new stress test, but the new lender still reviews your application.

Getting ready to buy? Read How Much House Can You Afford? and Fixed or Variable?, or try my mortgage calculator.

This article is general information, not financial advice. The details come from BCFSA, the Financial Consumer Agency of Canada, OSFI, the Department of Finance, BC's Mortgage Brokers Act and lenders' own websites, and were current at the time of writing. For BCFSA's information for consumers, see mortgage brokers.