Should I Opt for a Mortgage Broker or a Bank?

The question of whether to opt for a mortgage broker or a bank while taking out a mortgage on a prospective home is one that plagues several homeowners, especially those homeowners who are new to or ignorant of the market. While one cannot directly speak for or against either a mortgage broker or a bank, as one might be more suitable to your needs than another, and a universal statement might be misplaced.


Mortgage brokers act as middlemen between lenders and borrowers, helping fill in any gaps and ensuring secure financing for homeowners. An international statistic suggests mortgage brokers form nearly 10 percent of the mortgage business, thus making major contributions. Although this was previously quite high (nearly 30 percent), it has fallen since the mortgage crisis, after which in-house sales have gained traction, leading to a lag in the business of mortgage brokers.

Banks, on the other hand, deal directly with the clients without the interference of an intermediary, and, as would be expected, sell or promote only the loans they have to offer. This often translates into more paperwork and stress for the borrower, but also, for many, offers a sense of credibility, especially since most banks offer loans. However, for people that don’t qualify for loans, brokers are the next obvious choice, even more so since they might be able to cap off a little off the price and provide a lower rate than that offered by banks.



That being said, most people prefer their banks while opting for loans, primarily owing to the established trust they have with their banks, as well as the client’s financial history and details that banks have, which might make it easier for qualification and the like. Familiarity also plays an important part in the equation.

It is therefore important to gauge the pros and cons of both working with a mortgage broker and a bank and pick whatever is more suitable for you, in the situations and circumstances you find yourself in at the moment of question.

This website is written as a general guide and is not personalised advice. It is not intended as personal financial advice,nor is it specific advice to your situation. The author has written this in good faith and disclaims any liability from any action or inaction from how you may use this website or the results it may or may not achieve. Government, bank, company, insurer and lending policies, as well as other policies, procedures, and information in this website are likely to also change from time to time, and rules and decisions and policies may be applied differently and/or on a case-by-case basis. These rules may also change from the approximate time this was written. You are encouraged to recheck if these matters are accurate and up to date. By reading and using this website, you agree to hold the author, associated entities and/or associates, harmless.