A mortgage broker is a licensed professional who helps homebuyers (and homeowners looking to refinance) connect with lenders. Think of them as your personal matchmaker for mortgages—they don’t lend the money themselves, but they work with a wide network of banks, credit unions, and other lenders to find a mortgage that fits your financial situation.
A good broker takes the time to understand your income, credit history, down payment, and long-term goals. They use this information to present mortgage options that suit your needs, explain the pros and cons of each one, and guide you through the entire process—from pre-approval to closing.
In short: they simplify your life and save you time (and often money) by doing the rate shopping and paperwork for you.
How Is a Mortgage Broker Different from a Bank or Lender?
Banks and lenders offer their own mortgage products. When you go directly to a bank, you're limited to their in-house options—even if there might be a better deal elsewhere.
Mortgage brokers, on the other hand, aren’t tied to any single lender. They work with a variety of institutions and compare rates and terms across the board. That means more choice for you.
Here's a simple comparison:
| Bank | Mortgage Broker |
| Mortgage options | Only from that bank | From many lenders |
| Who they work for | The bank | You, the borrower |
| Access to specialty lenders | Rare | Often available |
| Application process | One option, one application | One application, multiple options |
Do I Need a Mortgage Broker to Buy a Home?
No—you don’t need a mortgage broker to get a mortgage. But for many homebuyers, especially first-timers, a broker can make the process a whole lot smoother.
Here’s why people choose to work with brokers:
- You get access to a broader range of mortgage options
- They can often find lower rates or better terms
- They help navigate complex situations (like self-employment or credit issues)
- You usually don’t pay out of pocket—lenders cover the broker’s fee
If you’re confident dealing with a bank and comparing offers yourself, that’s totally fine. But if you want guidance, options, and someone who knows the ins and outs of the mortgage world, a broker is worth having in your corner.
Cost and Value
How Much Does a Mortgage Broker Cost?
For most homebuyers, working with a mortgage broker won’t cost anything out of pocket. That’s one of the big reasons many people choose to go this route—there’s no upfront fee, and you still get professional advice and access to multiple lenders.
That said, there are a few exceptions:
- If your mortgage is with a private or alternative lender, there may be a broker fee involved.
- If your situation is more complex (self-employment, bruised credit, etc.), the broker may charge a fee to arrange financing.
In every case, a good broker will be upfront about any potential fees before anything moves forward.
Are Mortgage Brokers Free for Buyers?
In most traditional purchase or refinance situations, yes—they are free for buyers. Brokers are typically paid a commission by the lender once your mortgage is finalized and funded. This means you get expert guidance and multiple mortgage options, all without paying the broker directly.
Keep in mind: this commission doesn’t usually affect your interest rate or terms. In fact, because brokers shop around, they often find rates that are more competitive than what a bank would offer directly.
How Mortgage Brokers Get Paid (And Why It Matters to You)
Mortgage brokers are paid a finder’s fee or commission by the lender, based on the mortgage amount and term. This is built into the cost of doing business for the lender—it doesn’t come from your pocket in most standard cases.
Here’s why this matters:
- Brokers are motivated to find you the right mortgage—because they only get paid when your deal closes.
- A good broker puts your interests first, even though they’re technically being paid by the lender.
- Transparency is key. Brokers are required to disclose their fees or commissions if they charge you directly, especially with private or alternative lending.
So while you may not be writing them a cheque, it’s still a good idea to ask how they’re compensated. A reputable broker will explain everything clearly.