Choosing a mortgage broker in Canada means checking their licence, understanding how they are paid, and asking the right questions before you commit.

Choosing a mortgage broker in Canada means checking their licence, understanding how they are paid, and asking the right questions before you commit. A broker can compare lenders and handle paperwork, but they are not a neutral party — their compensation can influence which mortgage they recommend. This guide explains how to evaluate a broker, what to ask, and the conflicts to watch for.

Check	Why it matters	How to verify
Licence	Only a licensed broker or agent can arrange mortgages in most provinces.	Ask for their licence number and check the provincial regulator's online register.
Compensation	Commission from lenders can create a conflict if some lenders pay more.	Ask for a written disclosure of all fees and lender commissions.
Lender access	The number of lenders matters, but so does the type (banks, credit unions, monoline lenders).	Ask which lenders they submitted your file to and why.
Best-interest standard	Some provinces require brokers to act in your best interest; others require disclosure of conflicts.	Ask what standard applies in your province and how they document it.
Fees	Broker fees, lender fees, appraisal, and discharge fees add up.	Get a written fee disclosure before you sign anything.

What a mortgage broker actually does

A mortgage broker acts as an intermediary between you and lenders. In most provinces, they must be licensed, and they typically work with a panel of banks, credit unions, monoline lenders, and private lenders. The broker collects your documents, pulls your credit report, and submits your application to one or more lenders. They may also advise on product features, such as fixed versus variable rates, amortization, prepayment privileges, and portability.

What a broker does not do is lend money. They do not approve your mortgage — the lender does. They also do not replace legal advice, tax advice, or a home inspection. If you have a co-signer, the broker should explain how the co-signer's obligations work. You can read more about that in our guide to what a co-signer is.

Licensing and regulation across Canada

Mortgage brokering is regulated provincially and territorially, not by the federal government. Each province has its own regulator — for example, the Financial Services Regulatory Authority of Ontario (FSRA) and the BC Financial Services Authority (BCFSA). These regulators set licensing requirements, conduct rules, and complaint processes. Federal financial institutions, such as banks, are supervised by the Office of the Superintendent of Financial Institutions (OSFI), but that does not license individual brokers.

Before you work with anyone, ask for their licence number and the name of their regulator. Then verify it. Most provincial regulators publish an online register where you can search by name or licence number. If someone cannot provide a licence number, or if the number does not match the regulator's register, walk away. The Financial Consumer Agency of Canada (FCAC) has general information on mortgages and your rights, though it does not license brokers.

Some provinces impose a best-interest duty on mortgage brokers, while others require disclosure of conflicts of interest. Ask your broker what standard applies in your province and how they document that they met it. If they cannot explain it clearly, that is a warning sign.

How mortgage brokers get paid — and the conflicts that creates

Most mortgage brokers are paid by the lender through a commission, often a percentage of the mortgage amount. Some also charge the borrower a fee, especially for complex files, private mortgages, or when the lender does not pay a commission. A broker may also receive volume bonuses or tiered commissions from lenders. That means two brokers can offer the same rate but earn different amounts depending on which lender they place your mortgage with.

This is not automatically a problem. A broker who discloses their compensation and explains why they recommended a particular lender can still act professionally. But you should ask for a written disclosure of all fees and commissions. The FCAC loans page explains that lenders and brokers must disclose the cost of borrowing and certain terms before you sign. If a broker refuses to put their compensation in writing, treat that as a red flag.

Also ask whether the broker receives any incentive to steer you toward a specific lender, and whether they will show you the lender's commission on your file. Some brokers will not, but the ones who do are generally more transparent. Remember that a lower rate is not always the cheapest mortgage — fees, prepayment penalties, and restrictive terms can cost more over time. You can use our loan payment calculator to compare scenarios.

Questions to ask a mortgage broker

Use this list as a starting point. A good broker will answer without hesitation and give you written confirmation where appropriate.

1. Are you licensed, and what is your licence number? Then verify it with the provincial regulator.
2. Which lenders do you work with? Ask for the number and types of lenders. A broker who only works with one lender is not really brokering.
3. How are you paid? Ask for the commission from the lender, any borrower fee, and any volume bonuses or incentives.
4. Will you show me the lender's commission on my file? This helps you judge whether the recommendation is influenced by pay.
5. What is your process for finding the best mortgage for me? They should ask about your income, credit, down payment, future plans, and risk tolerance.
6. What fees will I pay? Broker fees, lender fees, appraisal, title insurance, and discharge fees. Get a written estimate.
7. What happens if my application is declined? Ask whether they will submit to multiple lenders and what that means for your credit score.
8. How do you handle rate holds and pre-approvals? Understand the expiry and conditions.
9. What are the prepayment penalties? This matters if you might sell, refinance, or pay down your mortgage early.
10. Do you have errors and omissions insurance? This protects you if the broker makes a mistake.

If you have damaged credit, ask how the broker works with lenders that serve that market. You can learn more in our guide to bad-credit loans.

Red flags and conflicts to watch for

Most mortgage brokers are honest, but the industry has conflicts. Watch for these warning signs:

• Pressure to sign immediately. Mortgages are complex; you should have time to review documents and ask questions.
• Guaranteed approval. No broker can guarantee a mortgage before the lender reviews your file.
• Upfront fees before any work. Some provinces allow broker fees, but be cautious if you are asked to pay a large sum before you have a written commitment.
• No written disclosure. If they will not put fees and commissions in writing, that is a major conflict of interest.
• Encouraging you to misstate income or debts. This is mortgage fraud and can lead to criminal charges and civil liability.
• Steering to a single lender without explanation. Ask why that lender is best for your situation.
• Not explaining the prepayment penalty. Some mortgages have harsh penalties that can erase the benefit of a lower rate.
• Unlicensed or unregistered. Always verify the licence. If they are not licensed, they should not be arranging mortgages.

How to compare brokers and lenders

Start by getting a written quote from at least two brokers and one or two direct lenders. Compare the interest rate, but also the annual percentage rate (APR) if available, the amortization, the term, the prepayment privileges, and the penalties. The Bank of Canada publishes policy interest rates and other rate information that can help you understand the rate environment, though it does not list mortgage rates from individual lenders.

Check your credit report before you apply. Errors can lower your score and cost you a better rate. The FCAC credit reports and scores page explains how to get your report from Equifax and TransUnion. If you are buying a home, CMHC provides information on mortgage loan insurance and homebuying.

Ask each broker how many lenders they submitted your file to. Some brokers will submit to multiple lenders at once, which can trigger multiple credit inquiries. That may affect your score, so ask them to be strategic. A good broker will explain the trade-offs.

Common mistakes to avoid

• Choosing a broker only because they promise the lowest rate. The lowest rate can come with high fees or restrictive terms.
• Not checking the licence. Always verify with the provincial regulator.
• Failing to ask about compensation. You have a right to know how your broker is paid.
• Ignoring the prepayment penalty. If you might move or refinance, this can be the biggest cost.
• Letting a broker submit to too many lenders. Multiple credit checks can lower your score.
• Signing without reading the commitment letter. Understand every fee and condition.
• Assuming the broker works for you. In many provinces, the broker's legal duty may be to the lender or to disclosure, not to you. Ask what standard applies.

Choosing a mortgage broker is about more than finding the lowest rate. It is about verifying licensing, understanding compensation, and asking questions until you are comfortable. A transparent broker will welcome the scrutiny. If you feel rushed or kept in the dark, find someone else.