If you are weighing up going to your bank against working with a broker, here is the honest shape of it. A bank can offer you its own products and only its own products. A broker takes one application out to a lot of lenders, and on most residential mortgages the lender pays the broker, so the comparison itself costs you nothing. Banks do genuinely win in some situations, and this is honest about which ones.
What is actually different
Your bank's mortgage specialist is an employee, and they can be excellent at their job. Their shelf simply holds one brand of mortgage, and selling it is the role. A licensed broker is regulated by the BC Financial Services Authority and works across lenders instead: the big banks, the credit unions, and the monoline lenders you have very likely never heard of, because they do not spend money on branches or on advertising.
That last group matters more than most people expect. Monolines do nothing but mortgages, often with lower rates and gentler prepayment terms than the branch down the street. Without a broker there is simply no way to reach them.
A bank is answering the question of what it can offer you. A broker is answering the question of what is out there for you. Those are two different questions, and they tend to produce two different mortgages.
The part that hides in the fine print
Rate gets all of the attention, and the expensive differences usually sit somewhere else entirely. Prepayment penalties are the big one. On a fixed mortgage the big banks generally work out the interest rate differential against their posted rates, which can make breaking the very same mortgage cost thousands more than it would at a monoline. Portability, how much you are allowed to prepay, and how a lender treats you when you come to renew all vary as well. Reading that fine print before it becomes your problem is a real part of the job.
Where the bank wins
Here is the honest bit. If you love having everything under one roof, your bank has come back with a genuinely sharp rate, and the terms around it are clean, then staying put can absolutely be the right call. Banks can also bundle a mortgage with business lending in ways a broker cannot always match, and some people simply value the branch relationship. My own rule is that your bank's offer is a data point rather than a verdict. Get it, and then let us compare it. I do tell people that their bank's offer is the best one on the table, because sometimes it truly is.
How each one gets paid
The bank specialist earns a salary and incentives from the bank. The broker is paid a finder's fee by whichever lender funds your mortgage, which is why the service is free to you on standard residential files. That fee varies very little between lenders, so there is no reason to steer you anywhere except toward the mortgage that closes. I wrote more about it in what a mortgage broker costs.
Why the gap widens in small-market BC
In the smaller markets here the difference gets larger. A computer in Toronto reads a Powell River acreage on a well and a septic field, or a seasonal logging income, and gets nervous. Knowing whose guidelines genuinely fit your property and your income, before the application goes anywhere, is most of what a broker is for. That is file strategy, and it is the part of this work I like best. If you are weighing up brokers, my guide on choosing a mortgage broker in BC covers what to ask.
Questions people ask me
Is it cheaper to get a mortgage through a broker or a bank?
Neither one is automatically cheaper. A broker compares a lot of lenders at once, which usually turns up a better combination of rate and terms, and the service is lender-paid on standard files. The only way to know for certain is to compare real offers, which is rather the whole point.
Does using a broker hurt my credit more than going to a bank?
No. A broker uses one application and one credit check to shop several lenders at once. Applying separately at several banks is what puts several checks on your file.
Can I use a broker and still keep my bank?
Yes. Your bank can be one of the lenders a broker checks, and if it comes out on top, you stay exactly where you are. Comparing costs you nothing.
