Last reviewed: 3 October 2026
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Mortgage broker vs. lender (bank) in Canada
In Canada you can get a mortgage from a lender directly or through a mortgage broker. The Financial Consumer Agency of Canada (FCAC) describes the structural difference: a lender lends the money, and a broker arranges the transaction. This page sets out that difference and what regulates each. It names no broker or lender.
What this term means: a mortgage lender lends money directly to the borrower; a mortgage broker does not lend money directly but arranges transactions by finding a lender.[1]
The two channels side by side
| Lender (directly) | Mortgage broker | |
|---|---|---|
| What it does | Lends money directly to you. The FCAC lists banks, caisses populaires, credit unions, mortgage companies, insurance companies, trust companies and loan companies as types of lenders.[1] | Does not lend money directly to you. Arranges transactions by finding a lender for you.[1] |
| Products | Some lenders only offer their products directly to borrowers. The FCAC says different lenders may have different interest rates and conditions for similar products.[1] | Some mortgage products are only available through brokers. The FCAC says that because brokers have access to many lenders they may offer a wider range of products, but that brokers do not all have access to the same lenders, so the mortgages available vary from broker to broker.[1] |
| Who you have the contract with | A mortgage is a legal contract between you and your lender.[2] | A mortgage is a legal contract between you and your lender; mortgage brokers connect borrowers with lenders.[2] |
| How the borrower pays | You repay the loan on the terms of your mortgage contract. The FCAC says that if you switch lenders after signing, you may have to pay a prepayment penalty.[1] | The FCAC says mortgage brokers generally do not charge fees for their services. Instead, they usually receive a commission from the lender when they arrange a transaction.[1] |
| Who regulates it | For federally regulated banks, the FCAC says they must offer and sell you products and services that are appropriate for you, considering your circumstances and financial needs, and must tell you if they have assessed that a product or service is not appropriate. For renewals, the lender must provide a renewal statement at least 21 days before the end of the term.[2][3] The cited FCAC pages do not describe the rules for other types of lender. | The provinces and territories regulate mortgage brokers; you can contact them to confirm that a broker is licensed or to make a complaint.[1] In Ontario, for example, the cited FSRA page says: “FSRA licences all mortgage brokers, agents, brokerages and administrators, a mandatory requirement for dealing and trading in mortgages throughout Ontario.”[4] |
What the two channels share
The FCAC says you can get a mortgage preapproval from mortgage lenders and from mortgage brokers. A preapproval process may let you know the maximum mortgage amount you could qualify for, estimate your payments, and lock in an interest rate for 60 to 130 days, depending on the lender. It does not guarantee approval, and the FCAC says a lender could refuse you even if you have been preapproved.[1] At renewal, the FCAC says you do not have to renew with the same lender and that you can contact various lenders and mortgage brokers.[3]
Questions the FCAC lists
- When dealing with a mortgage broker, ask which lenders they work with.[1]
- When getting preapproved, ask your broker or lender how long they guarantee the preapproved rate, whether the lowest rate applies automatically if interest rates go down while you are preapproved, and whether the preapproval can be extended.[1]
How to verify this yourself
Read the FCAC pages and the FSRA page in the reference list; they are the source for each statement above. To confirm that a broker is licensed, use your province’s regulator; our guide to checking a Canadian mortgage broker’s license lists each province’s lookup, and the regulator matrix shows which of our guides covers your province. Ask the broker or lender, in writing, how they are paid on your transaction (see also referral fee rules and conflict-of-interest disclosure).
What this page does not cover
This page is general information, not financial or legal advice, and is a Library explainer only: this site does not have a Canadian Register and does not vet, name or compare any Canadian broker or lender. It does not say which channel is suitable for anyone, does not compare rates or fees, and does not describe provincial rules other than the Ontario example above; those differ by province. It does not cover non-bank lenders’ regulation or the full range of federally regulated institutions. The FCAC pages are dated 15 October 2025; this page was last reviewed 3 October 2026.