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Bank vs broker cost comparison

Bank vs mortgage broker: compare the total cost of two offers

Put a bank offer and a broker (or monoline) offer side by side: interest over the term, fees, cash back, and the penalty if life makes you break the mortgage early.

Mitey the Yeti, the BankMortgages.ca guide, checking the numbers
$
yrs
yrs
0 = keep it to maturity.
pts
Falling rates make IRD penalties bigger.
%
$
$
Penalty method (fixed)
%
Sets the discount used in the IRD.
%
$
$
Penalty method (fixed)

Result over 60 months

Broker offer costs $4,785 less

Bank offerBroker offer
Monthly payment$2,764.59$2,709.29
Interest paid$104,784$99,999
Fees$0$0
Cash back−$0−$0
Penalty on breaking——
Total cost$104,784$99,999
Balance owing$438,909$437,442

What if you break early?

Total cost (interest + fees + penalty − cash back) if the mortgage ends at each point, with posted rates 1.00 points lower by then.

Mortgage endsBank offerBroker offerCheaper
At maturity (5 yrs)$104,784$99,999Broker offer by $4,785
After 12 months$41,571$40,580Broker offer by $991
After 24 months$59,847$55,877Broker offer by $3,970
After 36 months$75,110$70,884Broker offer by $4,226
After 48 months$92,624$85,921Broker offer by $6,703
Try the break testSet “Break the mortgage after” to 24 or 36 months. A fixed rate 0.20% lower can be wiped out by a posted-rate IRD penalty. For how the two methods differ, see IRD vs 3 months’ interest.
Mitey the Yeti, BankMortgages.ca’s guide, pointing out a tip
Mitey’s rule of thumb

Compare offers on the same term and rate type, get each in writing with its penalty wording, and ask your own bank to match the best quote before you move. Then score the winning rate on IsThisAGoodRate.ca.

Frequently asked questions

Is a broker always cheaper than a bank?

No. A broker can often show rates from several lenders, including monolines, but your own bank may match or beat them, especially if you bring other business. What matters is the total cost over the term: rate, fees, cash back, and what it costs if you have to break the mortgage early. That last part is where offers with similar rates can differ by thousands.

How are mortgage brokers paid?

For most residential mortgages the lender pays the brokerage a fee when the mortgage funds, so the borrower usually pays nothing directly. Provincial regulators require brokers to disclose how they are paid and any conflicts of interest. See bank vs broker vs monoline for the rules and sources.

What does this tool include?

Interest paid over the months you hold the mortgage, fees you pay (appraisal, legal or admin), cash back you receive, and, if you break early, an estimated prepayment penalty using each offer’s IRD method. It does not include property tax, insurance premiums or the value of features like a readvanceable HELOC.

Sources

  1. Reduce or avoid prepayment penalties — FCAC, checked Oct 31, 2026
  2. Working with a mortgage professional — FSRA (Ontario), checked Oct 31, 2026
  3. Interest Act (R.S.C. 1985, c. I-15), ss. 6 and 10 — Justice Laws, checked Oct 31, 2026

Keep exploring

Bank, broker or monoline?

Who they are and how they are paid.

Penalty estimator

One mortgage in detail.

Compare the big six

Prepayment and penalty terms.

Educational information only, not financial, legal or tax advice. BankMortgages.ca is independent and is not affiliated with, endorsed by or paid by any bank named on this site. Bank terms change: confirm every rate and term with the lender and the official sources linked on each page before you act. Read the full disclaimer.