Short answer first. A bank can only offer you its own products; a broker shops many lenders with one application, and on most residential mortgages the lender pays the broker, so the comparison costs you nothing. Banks still win in some situations, and this post is honest about which ones.
The structural difference
Your bank's mortgage specialist is an employee. They can be excellent, but their shelf holds exactly one brand of mortgage, and their job is to sell it. A licensed broker is regulated by the BC Financial Services Authority and works across lenders: big banks, credit unions, and monoline lenders you've never heard of because they don't spend money on branches or Super Bowl ads.
That last group matters more than people expect. Monolines only do mortgages, often with lower rates and friendlier prepayment terms than the branch down the street. Without a broker, you simply can't reach them.
A bank answers the question “what can we offer you?” A broker answers “what's out there for you?” Those are different questions.
What about the fine print?
Rate gets all the attention, but the expensive differences usually hide in the terms. Prepayment penalties are the big one: on a fixed mortgage, big banks typically calculate the interest rate differential against their posted rates, which can make breaking the same mortgage cost thousands more than at a monoline. Portability, prepayment room, and how a lender treats you at renewal all vary too. Part of a broker's job is reading that fine print before it's your problem.
Where the bank wins
Honesty time. If you love banking under one roof, your bank offers you a genuinely sharp rate, and the terms are clean, staying can be the right call. Banks can also bundle mortgages with business lending in ways brokers can't always match, and some buyers just value the branch relationship. My own rule: the bank's offer is a data point, not a verdict. Get it, then compare it. Sometimes I tell people their bank's offer is the best one on the table, because sometimes it is.
How each one gets paid
The bank specialist earns 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. The fee varies little between lenders, so there's no incentive to steer you anywhere except the mortgage that closes. I wrote more about this in how much does a mortgage broker cost.
The practical difference in BC
In small-market BC, the gap widens. A computer in Toronto reads a Powell River well-and-septic acreage or a seasonal logging income and gets nervous. A broker's job is knowing which lender's guidelines actually fit your property and your income, before the application goes anywhere. That's file strategy, and it's the part I like most. If you're vetting brokers, my guide on choosing a mortgage broker in BC covers the questions to ask.
Frequently asked questions
Is it cheaper to get a mortgage through a broker or a bank?
Neither is automatically cheaper. A broker compares many lenders at once, which usually surfaces a better combination of rate and terms, and the broker's service is lender-paid on standard files. The only way to know is to compare real offers, which is 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 pull to shop multiple lenders. Applying separately at several banks means several pulls.
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 wins, you stay. You lose nothing by comparing.