If you’ve ever wondered how mortgage brokers earn their income – and whether working with one will cost you anything – you’re not alone. At The Mortgage Centre Guelph, we believe in transparency, so here’s a quick breakdown of how brokers get paid, and how that impacts you as a borrower.
No Out-of-Pocket Costs for Prime Borrowers
If you’re a prime, A+ borrower with great credit, stable income, and a strong financial profile, your mortgage broker is typically paid directly by the financial institution you choose to work with. That means you don’t pay the broker a fee for their services.
Lenders (like banks or credit unions) pay a commission to the brokerage once your mortgage closes. This commission is usually between 0..6575% and 1% of your total mortgage amount. So for example, on a $500,000 mortgage, the brokerage might receive around $3,750–$5,000.
It’s important to note that this amount goes to the brokerage firm not directly to your individual broker — and your agent earns a portion of that based on their agreement with the brokerage.
More Lenders, More Choice
Every licensed mortgage brokerage in Ontario must disclose how many lenders they work with. And in general, the more lenders your broker has access to, the better. Why? Because more options mean a better chance of finding a mortgage product that truly fits your unique needs at a competitive rate.
At Skip The Bank, we work with a wide variety of institutions, from big banks to alternative lenders and private mortgage solutions. This gives you more flexibility and better choice – all in one place.
Access to Major Banks – with Expert Guidance
You might be surprised to learn that mortgage brokers can place mortgages with many of the same banks you already know, like TD, Scotiabank, and BMO. So why not just go directly to the bank?
The key difference lies in expertise and objectivity.
When you walk into a bank, you’re only offered that bank’s products. A mortgage broker, on the other hand, does a full comparison across multiple lenders – helping you evaluate rate, terms, conditions, and flexibility. They also take the time to understand your bigger financial picture, and recommend options that align with your long-term goals.
What About Non-Standard Traditional Borrowers?
Not every borrower fits into a conventional lending box, and that’s okay! If you’re self-employed, have credit challenges, or are new to Canada, you may need to work with an alternative or private lender.
For example, if you’re looking for a self-employed mortgage, traditional banks might have stricter requirements – but a broker can match you with lenders who specialize in your type of income and documentation.
In these cases, fees may apply. Alternative lenders typically charge a fee of 1–2% of the total mortgage amount, and in some cases, the brokerage may also charge a fee for arranging the financing. These fees are clearly disclosed upfront and are usually rolled into your total loan amount.
We also help clients explore options such as debt consolidation in Guelph, where refinancing your home can help you combine high-interest debts into a single, more manageable payment – often at a much lower rate.
In Conclusion
Working with a mortgage broker gives you expert advice, greater choice, and in most cases – at no direct cost to you. Whether you’re a top-tier borrower or navigating a more complex situation, brokers are there to advocate for your best interests and help you secure the right mortgage solution – including access to private mortgage solutions, self-employed mortgages, and debt consolidation strategies.
Have questions about your own mortgage? Reach out to our team at The Mortgage Centre Guelph. We’re here to guide you every step of the way.