You can get a mortgage from a bank branch, a credit union, a mortgage broker or an online lender. The rate you see first is rarely the whole story. The right channel depends on what you need, how much you want to compare, and what the fees and penalties look like.
The bank branch
- Offers only its own products. Its advisers can explain its rates and rules well.
- Rates for your term are often posted, and discounts are negotiated.
- Good if you already bank there and want one relationship.
The mortgage broker
- Works with several lenders, so you can compare more products at once.
- Usually paid by the lender after the mortgage funds, not by you. Ask how they are paid and whether any fee applies.
- Helpful for self-employed buyers, complex income, or a renewal you want to shop around.
Questions to ask either one
- What rate, term and penalty would I get, in writing?
- How is the penalty calculated if I break the mortgage?
- What prepayment privileges do I get each year?
- Are there fees, and who pays them?
- Can the rate be held, and for how long?
- Will you tell me if a cheaper option appears before I sign?
Compare the total cost, not just the rate
A lower rate with a steep penalty can cost more than a slightly higher rate with flexible terms. Compare the full cost over the term you expect to keep the mortgage: interest, fees, prepayment privileges and the penalty if you move early.
Before you decide
- Get at least two quotes, from different types of lenders.
- Ask for every quote to use the same down payment, amortization and term, so they can be compared directly.
- Read the commitment letter before you accept.
This guide is general information, not financial advice. Mortgage products, fees and how brokers are paid vary, so confirm the details with each lender or broker in writing.
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