Mortgage Broker vs Bank

 

 

Although banks have always been the first priority of borrowers while going for a mortgage, however the increasing popularity of mortgage brokers is cutting off the market share of banks. If you have already planned for buying your first mortgage in Canada, you must know how and why do these entities are different from each other. Find out the detailed information on Mortgage Broker vs. Bank.

 

Comparison of Mortgage Broker vs. Bank

Structure: A bank is a chartered institution with a widespread network and plentiful resources. A mortgage broker on the other hand, is a licensed individual or group specializing in mortgage. Mortgage brokers are affiliated with multiple lenders at a time.

 

Services: Banks usually have an ample service portfolio offering a range of services besides just mortgage. Examples are credit card loans, auto loans, student loans and personal banking. In contrast to that, a mortgage broker only specializes in mortgages and does not provide diverse services.

 

Alternatives: Although banks offer multiple mortgage variants at a time, you cannot equate them with the options provided by a mortgage broker. Banks are restricted to offer their own rates and products, while the brokers have access to different products from different banks.

 

Negotiation: Banks do provide you discounts on mortgage rates, however the responsibility for this negotiation is upon the borrower himself. Unlikely to that, your mortgage broker will negotiate with the bank on your behalf. As mortgage brokers acquire high quantities of mortgage products from the bank, they sometimes can draw a better discount for you.
To understand the difference more easily, analyze the table stating mortgage broker vs. bank.

 

PARTICULAR

BANK

MORTGAGE BROKER

Composition

Institution

Individual

Revenue and Income

Interest

Commission

Money Lending

Yes

No

Puts Application Together

Yes

Yes

Market Share

60%

40%

Examples

TD Bank

The Mortgage Centre

Scotia Bank

Dominion Lending

Home Trust

Safebridge Financial

 

It is compulsory to note that a mortgage broker does not lend the money by its own, but helps the borrower in acquiring a mortgage.