Closing Costs & Insurance
Do Mortgage Brokers Charge Fees in Canada?
Do mortgage brokers charge fees in Canada? Learn who really pays the broker, when borrower fees apply, how disclosure works, and what to ask before signing.
Most mortgage brokers in Canada do not charge you a fee directly. Mortgage broker fees in Canada are usually paid by the lender as a commission, so a standard residential mortgage arranged through a broker typically costs you nothing out of pocket beyond your normal closing costs. That said, fees do exist in specific situations — private lending, complex files, and fee-for-service arrangements — so get the compensation terms in writing before you sign anything.
How mortgage brokers get paid in Canada
Mortgage brokerages in Canada are licensed and regulated at the provincial level. For a typical residential mortgage, the brokerage is compensated by the lender through a finder's fee or commission once the mortgage funds. That payment is usually calculated as a percentage of the mortgage amount and is set by the lender, not by you.
This is why the answer to "do brokers charge fees?" is usually no. It also means the broker's income depends on placing your mortgage with a lender that pays commission. Some lenders — certain credit unions and a handful of niche programs — pay little or nothing, and that is one reason a broker may ask you to cover a fee on those deals instead.
Ask early: "How are you compensated on my file, and by whom?" A licensed broker should answer directly. If they can't, or if the answer changes late in the process, treat that as a warning sign.
When you may actually pay a broker fee
You may be asked to pay out of pocket in several common scenarios:
- Private and alternative lending. If you don't qualify with a bank or a monoline lender, a broker may place you with a private lender. These deals often carry a broker fee plus a separate lender fee, both usually expressed as a percentage of the mortgage amount.
- Complex or hard-to-place files. Self-employed borrowers with thin documentation, bruised credit, unusual properties, or non-resident situations can take more work to place, and some brokerages charge for that time.
- Lenders that pay no commission. If you specifically want a lender or product that doesn't compensate the brokerage, the broker may charge you a flat fee instead.
- Fee-for-service arrangements. Some brokers work on a flat or hourly fee and rebate or forgo lender commission. This is more common for advice-only work than for full placement.
- Cancellation or commitment fees. If you sign an agreement and then walk away after the broker has done the work, the brokerage may charge a fee. Read the agreement before you sign it.
Broker fee structures at a glance
| Situation | Who typically pays | How it's usually structured | What to confirm |
|---|---|---|---|
| Standard mortgage with a lender that pays commission | Lender | Percentage of the mortgage amount, set by the lender | That the written disclosure shows lender-paid compensation and no borrower fee |
| Private or alternative lender deal | Borrower | Broker fee plus a separate lender fee, often a percentage of the mortgage | The total cost of borrowing, including both fees and any renewal charges |
| Complex file (self-employed, bruised credit, unusual property) | Borrower, sometimes | Flat fee, hourly fee, or percentage | Whether the fee is refundable if the mortgage doesn't fund |
| Non-commissionable lender or fee-for-service broker | Borrower | Flat fee or hourly rate | What the fee includes and whether it's credited at closing |
Amounts vary widely by province, lender, and file. Never assume a number you saw online applies to you — ask for your own written disclosure.
Fee disclosure and licensing rules
Mortgage brokerages are licensed by provincial regulators, such as the Financial Services Regulatory Authority of Ontario (FSRA), the BC Financial Services Authority (BCFSA), the Real Estate Council of Alberta, and the Autorité des marchés financiers in Quebec. Licensing rules generally require a brokerage to disclose in writing the fees you will pay, how the brokerage is compensated, and any conflicts of interest.
You can verify a broker's licence with your provincial regulator, and you can complain there if you believe a fee wasn't properly disclosed. Keep every disclosure document, agreement, and email. If a fee is quoted verbally, ask for it in writing before you commit.
Fees don't change how you qualify. Federally regulated lenders still apply OSFI Guideline B-20, including the federal mortgage stress test — you must qualify at the higher of your contract rate plus two percentage points or the published qualifying-rate floor (confirm the current floor with OSFI or your lender). They also apply GDS and TDS ratios to measure affordability, and if your down payment is under 20% you'll need CMHC mortgage default insurance or equivalent coverage from another insurer. See mortgage default insurance explained for how that premium works.
Broker fees vs. your other closing costs
A broker fee, if you pay one, sits on a longer list. Budget for closing costs when buying a house in Canada, including land transfer tax, legal fees, title insurance, an appraisal, and any adjustments. Run your numbers through a closing costs calculator so a broker fee doesn't surprise you at the finish line.
Ongoing costs matter too. A broker fee doesn't change your rate, but the mortgage you end up with does. Variable-rate mortgages track the Bank of Canada policy rate and your lender's prime rate, and if you break a fixed-rate mortgage early the interest rate differential (IRD) penalty can outweigh any upfront fee. Read IRD explained before assuming a lower-fee deal is cheaper overall.
Questions to ask before you commit
- How are you paid on my file, and by which lender?
- Will I owe you any fee, deposit, or commitment fee — and under what conditions?
- Is the fee refundable if the mortgage doesn't fund or you can't place my file?
- Are there lender fees, brokerage fees, or both on the deal you're recommending?
- Is your compensation higher with any of the lenders you're comparing for me?
- What happens if I cancel, or switch lenders before closing?
The bottom line: for most standard residential mortgages in Canada, the lender pays the broker and you pay nothing extra. Fees show up mainly where the deal is harder to place or the lender doesn't pay commission. Confirm the arrangement in writing, compare the full cost of borrowing rather than just the upfront number, and you'll know exactly what you're paying for.
Frequently asked questions
Do mortgage brokers charge fees in Canada?
Usually not for a standard residential mortgage. The brokerage is typically paid by the lender through a commission once the mortgage funds, so you don't pay the broker directly. Fees are more common on private or alternative lending, complex files, and fee-for-service arrangements. Always ask how the brokerage is compensated and get any fee in writing before you sign.
How much does a mortgage broker charge?
It varies. When a fee applies, it's often expressed as a percentage of the mortgage amount, sometimes with a minimum dollar amount, and private-lending deals can carry both a broker fee and a lender fee. There's no single national figure. Ask your brokerage for a written disclosure showing the exact fee, what it covers, and whether any part is refundable if your mortgage doesn't fund.
Is it cheaper to use a bank instead of a mortgage broker?
Not automatically. On a typical mortgage, lender-paid commission means your out-of-pocket cost through a broker is similar to going directly to a bank. A broker can compare multiple lenders, which may help you find better terms, but the rate you're offered still depends on your credit, income, down payment, and the lender's pricing. Compare the full cost of borrowing, not just whether a fee appears.
What fees might I still pay when using a mortgage broker?
Even when the broker is paid by the lender, you'll still cover standard closing costs: legal fees, title insurance, an appraisal if required, land transfer tax, and adjustments. If your down payment is under 20%, mortgage default insurance applies. If you break the mortgage early, a prepayment penalty — often the interest rate differential on a fixed rate — may apply.