Mortgage Broker or Bank in Ontario (2026): On a Normal Deal, the Broker Costs You Nothing
The lender pays them. Which raises the better question — who is the bank’s specialist working for?
In short
On a standard mortgage with a major lender, the lender pays the broker a finder’s fee — commonly 0.5 to 1.1 per cent of the mortgage, paid on closing. The borrower pays the broker nothing.
You pay a broker fee yourself only on B-lender and private deals, where 1 to 2 per cent is normal — and it must be disclosed to you in writing before you commit.
The asymmetry nobody explains: a bank’s mortgage specialist is not a broker under the Code of Conduct for the mortgage broking sector. They are that bank’s employee, they are not licensed by the provincial regulator as a broker, and they can offer exactly one lender’s products. Both can be good to deal with. Only one of them is comparing.
Who pays, and how much
| Deal type | Who pays the broker | Typical amount |
|---|---|---|
| A-lender (bank, major lender) | The lender | 0.5–1.1% finder’s fee, on closing |
| B-lender (alternative) | Often you | About 1–2% of the loan |
| Private mortgage | You | About 1–2%, plus lender fees |
| Bank mortgage specialist | The bank employs them | Salary and incentives, invisible to you |
The last row is the one worth sitting with. Nobody hands you a disclosure about how a bank employee is compensated, because they are staff rather than an intermediary. That does not make them dishonest. It does mean the comparison you are being shown has one entry in it.
Check the licence before the rate
Mortgage brokerages, brokers and agents in Ontario are licensed by the Financial Services Regulatory Authority of Ontario under the Mortgage Brokerages, Lenders and Administrators Act. Unlicensed brokering is not permitted.
FSRA publishes a register you can search. It takes about a minute and it is the same habit as checking a trade licence or a real estate agent — a public database exists so you do not have to take anyone’s word.
Note the difference in title. An agent works under a brokerage and a supervising broker. A broker has additional qualification. Both are licensed; ask which you are dealing with, and get the licence number.
When a broker wins, and when the bank does
Neither is automatically better, and anyone telling you otherwise is selling.
A broker tends to win when:
The bank tends to win when:
The honest method is to get both, then compare total cost over the term rather than the headline rate: penalty formula, prepayment privileges, portability, and any fees. A rate that is 0.1 per cent lower can cost thousands more if you break the mortgage early under a harsh penalty calculation.
The number that actually costs people money
Not the rate. The prepayment penalty.
Most people do not keep a mortgage to the end of its term — they move, refinance or separate. On a fixed mortgage the penalty is normally the greater of three months’ interest or an interest rate differential, and lenders calculate the differential very differently. Two mortgages at the same rate can produce penalties that differ by five figures.
So ask, in writing, before signing: how is the prepayment penalty calculated, and what would it be today? A lender or broker who cannot answer that clearly has told you something useful.
Red flags
What to do next
Ask three questions of whoever you are dealing with: are you licensed and what is your number, who pays you on this deal, and how is the prepayment penalty calculated. Then get the same three answers from one other source and compare.
If you are buying, the mortgage is only part of the bill — closing costs covers land transfer tax and everything else due on the day, and lawyer fees covers the legal side.
Compare professional services in Ontario on Ontario24 and contact brokers directly. Ontario24 is a classified directory — we help you find and compare, and we do not vet, endorse or recommend anyone, which is why this guide points you at the regulator’s register instead.
Before you call anyone, it helps to know what this job should cost and what the next one will. What things cost in Ontario in 2026 puts 75 service prices in one table.
Frequently asked questions
On a standard deal with a major lender, the lender does — through a finder’s fee commonly between about 0.5 and 1.1 per cent of the mortgage amount, paid when the deal closes. The borrower usually pays the broker nothing at all.
On B-lender and private mortgages, where a broker fee of roughly 1 to 2 per cent of the loan is normal. It must be disclosed to you in writing before you commit. If a fee appears on a standard A-lender deal, ask what it is for and get the answer on paper.
No. A bank’s mortgage specialist is that bank’s employee and can offer only that bank’s products. A licensed mortgage broker or agent works with many lenders. Both may be perfectly good to deal with — but they are answering different questions, and only one of them is comparing.
The Financial Services Regulatory Authority of Ontario, under the Mortgage Brokerages, Lenders and Administrators Act. Every brokerage, broker and agent must be licensed, and FSRA publishes a register you can search to confirm a licence in about a minute.
A broker submits your application to lenders, and each lender that pulls your file creates an inquiry. A competent broker manages this by shopping with one pull where possible rather than scattering applications. Ask directly how many lenders they intend to submit to.
No, and anyone promising that is selling. Brokers often access lower posted rates because they compare many lenders, but a long-standing bank relationship, a promotional offer or a bundled package can win. The honest answer is to get both and compare the total cost, not the rate alone.
Their FSRA licence number, how many lenders they will approach, whether any fee is payable by you and on what terms, what the penalty for breaking the mortgage early would be, and whether the rate is held and until when. Get the fee position in writing before you proceed.
Sources
Checked 18 September 2026. Finder’s fee ranges and broker fee ranges on alternative and private lending come from published 2026 Canadian mortgage industry guidance, much of it written by brokerages, so treat the figures as market practice and get your own fee position in writing. Licensing of mortgage brokerages, brokers and agents in Ontario, the requirement to disclose fees in writing, and the public register are administered by the Financial Services Regulatory Authority of Ontario under the Mortgage Brokerages, Lenders and Administrators Act. Nothing here is financial advice and Ontario24 is not a licensed advisor — this is consumer information about who pays whom and how to verify a licence. On your own borrowing, speak to a licensed professional you have checked on FSRA’s public licence list. Ontario24 is a classified directory and does not arrange or broker mortgages.