Do Mortgage Brokers Charge Fees? How Brokers Get Paid in Canada
Mortgage broker fees in Canada are simpler than most people expect. On a standard prime mortgage the lender pays the broker when your mortgage funds, so the advice is typically free to you. A fee can apply on some alternative or private files, and any fee must be disclosed to you in writing before you commit.
Mortgage broker fees CanadaLender-paid on prime dealsFees disclosed in writingNo fee to get pre-approvedFSRA #13737100+ lenders
It is a fair question to ask before you hand anyone your pay stubs and credit report: if I am not paying the broker, who is, and am I quietly paying for it somewhere else? Most people assume a broker must add a cost on top of what the bank would charge. On a standard prime mortgage the opposite is true. The lender pays the broker for bringing it a qualified, well-packaged file, much as a bank pays its own branch staff. Where you would pay a fee yourself, the rules say you see the number in writing first, not at the lawyer’s office.
The short answer
Do mortgage brokers charge fees? On most prime (A-lender) purchases and renewals, no: the lender pays the brokerage a commission when your mortgage funds. On some B-lender, private or complex files a borrower-paid broker fee can apply, often alongside a separate lender fee. Either way, the amount is disclosed to you in writing before you sign, and you are free to walk away.
What are mortgage broker fees?
Mortgage broker fees are what a broker is paid for arranging your mortgage. In Canada, on most prime mortgages the lender pays that compensation when the mortgage funds, so you pay nothing directly. A borrower-paid broker fee can apply on some alternative, private or complex files, and it must be disclosed in writing before you commit.
What you get
Why Canadians choose Mortgage Squad Advisors.
On standard prime “A” purchases and renewals, the lender pays our compensation, not you
No fee to get pre-approved, no fee for advice, and no obligation to proceed
Your rate is set by the lender’s pricing and your own profile, not by what the broker earns
Any borrower-paid broker fee is disclosed in writing, in dollars, before you sign
Broker fees and lender fees are shown separately, so you can see who charges what
Volume bonuses and other lender incentives are material conflicts we must disclose in writing
No fee is deducted from your mortgage funds without your written consent
We compare 100+ lenders, so a fee is only on the table when a fee-free option genuinely won’t work
FSRA-licensed brokerage (#13737), reviewed by our Principal Broker
Maya, our 24/7 AI advisor, can walk you through how we would be paid on your file
Maya · 24/7 AI advisor
Question about mortgage broker? Maya answers instantly in 50+ languages.
At the first conversation, ask plainly: “Who pays you on my file, and is there any fee to me?” On a standard prime mortgage the answer should be that the lender pays. If your file may need an alternative or private lender, a straight broker tells you that a fee could apply before any application goes out.
2
Get every cost in writing
Before you sign, you should receive a written disclosure that sets out the mortgage terms, the cost of borrowing, any broker fee and any lender fee in dollars. In Ontario, the brokerage must also disclose any material conflict of interest, such as a lender volume-bonus program.
3
Decide with the full picture
Compare the total cost, including rate, fees and penalties, against your other options. On a prime deal the lender pays the broker only once your mortgage funds. If a borrower-paid fee was disclosed and you agreed to it, it is handled at closing, never as a surprise.
Compensation depends mostly on which kind of lender funds your mortgage. This is the general pattern; your own file’s numbers are always disclosed in writing before you commit.
How mortgage brokers are typically paid on prime, B-lender and private mortgage files in Canada
Lender type
Who usually pays the broker
Borrower-paid broker fee?
Separate lender fee?
Prime (A-lender)
The lender, when your mortgage funds
Not on standard purchases or renewals
Not on a standard A-lender file
B-lender (alternative)
Often the lender, but it varies by lender and file
Can apply, depending on the file
Common on B-lender mortgages
Private lender
Usually the borrower, through a broker fee
Usually applies
Usually applies
General pattern only, not a quote. Every fee on your file is disclosed in writing before you sign. See our compensation disclosure for how we are paid.
Do mortgage brokers charge fees? The honest answer
For most Canadians buying a home or renewing a standard mortgage, no. On a prime (A-lender) mortgage, the lender pays the broker when your mortgage funds. That payment covers the shopping, the negotiating, the packaging of your file and the paperwork, so the service is typically free to you. At Mortgage Squad Advisors we do not charge borrower fees on standard A-lender purchases or renewals.
The honest answer has a second half, and hiding it would defeat the point of this page. Fees can apply on some alternative (B-lender) and private mortgage files, and on unusually complex arrangements. On those deals the lender often pays the broker less, or nothing, and the file takes far more work to place. When a fee applies, it must be disclosed to you in writing upfront, before you commit. If you want the wider picture of what a broker does for that compensation, see what a mortgage broker does and how the process works.
How mortgage brokers get paid on a prime mortgage
When a broker places your approved mortgage with a prime lender and it funds, that lender pays the brokerage. The industry often calls this a finder’s fee: the lender’s cost of acquiring a qualified borrower through the broker channel rather than through its own branches, advertising and sales staff. Every bank carries that cost one way or another. A bank simply pays its own employees out of the margin on your mortgage, where you never see it itemized.
Not all lender compensation looks the same. The most common form is a one-time payment when your mortgage funds. Some lenders instead pay a smaller trailer each year you stay with them. Some also run volume bonus programs that pay brokers more for placing more business. In Ontario, brokerages must disclose material conflicts of interest like these in writing. Our compensation disclosure sets out how we are paid, and your recommendation should always rest on your rate, terms and fit, never on which lender pays more.
How much does a mortgage broker cost?
On a standard prime purchase or renewal, the cost to you is typically zero. You pay for your mortgage through the rate the lender sets, and that rate depends on the lender’s pricing and your own profile, not on the broker’s compensation. Because a broker shops 100+ lenders on one application, the incentive is to bring you a competitive rate. Brokers can also push on pricing, which we explain in how brokers negotiate a better mortgage rate. For today’s numbers, check our current rates rather than any figure quoted in an article.
On alternative or private files, the cost depends on the lender, the size of the loan, the property and how much work the file needs. That is why there is no honest one-size figure, and why anyone quoting you a fee before they have seen your file is guessing. What you should expect is a specific dollar amount, in writing, before you sign, with the broker fee, any lender fee and other closing costs such as legal fees listed separately. Compare that total against your alternatives, including waiting to qualify for a lower-cost lender.
When a fee applies: alternative, private and complex files
Borrower-paid fees usually appear on files that a prime lender won’t approve as they stand. That includes bruised or rebuilding credit, some self-employed income that is hard to document the way a bank wants, unusual properties, urgent timelines, and situations such as arrears or a consumer proposal. These deals take substantial work to structure, and the lenders that fund them often pay brokers little or nothing.
Two separate charges can show up. A broker fee goes to the brokerage for arranging the financing. A lender fee is charged by the B-lender or private lender itself. Private mortgages usually carry both, on top of a higher rate, which is why they work as short bridges with a planned exit rather than long-term homes for your mortgage. A good broker shows you the fee-free options first, explains why they won’t work if that is the case, and maps out how you would move back to lower-cost lending. We do not deduct any fee from your mortgage funds without your written consent.
How fees must be disclosed in writing
In Ontario, mortgage brokerages are licensed and regulated by the Financial Services Regulatory Authority of Ontario (FSRA) under the Mortgage Brokerages, Lenders and Administrators Act, 2006. Before you commit, you are entitled to a written disclosure covering the mortgage’s material terms, costs, risks and cost of borrowing, a written disclosure of any conflict of interest, and a clear statement of whether the broker is acting for you, the lender or both. The disclosure has to reach you no later than two business days before you sign, unless you consent in writing to receive it later. We would suggest you don’t.
At Mortgage Squad Advisors (FSRA brokerage licence #13737), we give you a summary of all compensation we expect to receive on your file, lender-paid and any borrower-paid amounts, at the same time as the mortgage disclosure. Outside Ontario, each province’s regulator sets its own disclosure rules and timing, so confirm the current rules with your broker. You can review our licensing details on our licensing page.
Questions to ask any broker about fees
You don’t need to be a mortgage expert to protect yourself. Ask four things. “Who pays you on my file?”“Is there any fee to me, and how much?”“Is there a separate lender fee?” And “Do you receive any bonus or incentive from the lender you are recommending?” A licensed broker answers all four plainly and puts the answers in writing. Vague answers, pressure to sign quickly, or reluctance to write down a fee are reasons to slow down. For the full checklist, including licensing, lender access and communication, read how to choose the right mortgage broker in Canada, and for the bigger picture see our complete guide to working with a mortgage broker in Canada.
Find your local mortgage broker: we work with clients across Canada through our mortgage broker team, including in Toronto, Vaughan and Mississauga. You can start a free pre-approval with no obligation, or ask Maya how we would be paid on your specific file.
FAQ
Common questions, answered.
Don’t see yours? Ask Maya — instant answer, any time.
Do mortgage brokers charge fees in Canada?
On most prime mortgages, no. The lender pays the brokerage a commission, sometimes called a finder’s fee, when your mortgage funds, so there is no direct cost to you for the pre-approval, the shopping or the advice. A borrower-paid broker fee can apply on some B-lender, private or complex files, and it must be disclosed to you in writing before you commit.
How much does a mortgage broker cost?
On a standard prime purchase or renewal, a mortgage broker typically costs you nothing, because the lender pays. On alternative or private files the cost depends on the lender, the loan and how much work the file takes, so there is no single number that applies to everyone. A trustworthy broker will not guess at a fee before seeing your file, and will give you the exact amount in writing before you sign anything.
How do mortgage brokers get paid if I don’t pay them?
The lender pays them. When a broker places your mortgage and it funds, the lender pays the brokerage for sourcing and packaging a qualified borrower. It is the lender’s cost of finding business through brokers instead of through its own branches. Some lenders pay an upfront amount, some pay a smaller ongoing trailer, and some offer volume bonuses, which must be disclosed as a conflict of interest.
Does the broker’s commission make my rate higher?
Your rate is set by the lender’s pricing for your product and by your own profile: credit, income, down payment and the property. The lender’s payment to the broker is not added to your rate or payment as a separate charge. Because a broker compares many lenders, the way to win your business is to find a competitive rate. You can check current pricing on our rates page.
What is the difference between a broker fee and a lender fee?
A broker fee is paid to the brokerage for arranging the mortgage. A lender fee is charged by the lender itself, usually on B-lender or private mortgages, to cover its higher risk and setup. They are separate charges, and on an alternative or private file you may see both. Your written disclosure should list each one on its own line so you know exactly who is charging what.
When would I pay a broker fee myself?
Borrower-paid broker fees show up mainly on files that a prime lender won’t approve as is: private mortgages, some B-lender deals, and complex or time-sensitive files that take substantial work to structure. On those deals the lender often pays the broker little or nothing. The fee should be weighed against the alternative, which is sometimes no approval at all.
How are mortgage broker fees disclosed?
In Ontario, a licensed brokerage must give you a written disclosure covering the mortgage’s material terms, costs and cost of borrowing, plus any conflict of interest, before you commit. It must reach you no later than two business days before you sign, unless you consent in writing to receive it later. Other provinces set their own timing, so confirm the current rules with your broker.
Can a mortgage broker charge me a fee upfront?
Be cautious. A fee should only ever be charged when it has been disclosed to you in writing, with the amount and what it covers, before you commit. We do not deduct any fee from your mortgage funds without your written consent. If someone asks for money before explaining in writing what it is for, stop and ask questions, or check their licence with the provincial regulator.
Is using a mortgage broker cheaper than going to my bank?
On a prime mortgage, using a broker usually costs you nothing extra, and a broker compares 100+ lenders instead of one bank’s shelf. A bank pays its own staff out of its margin, which you never see itemized. Whether a broker saves you money on your file depends on the rate, terms and penalties available, so compare the whole offer, not just the headline rate.
