The vast majority of Canadians (57%) still opt to get their mortgages directly from a bank.

Traditional bank mortgages have significant benefits that make them appealing to a large segment of the population.

They are outlined here:

1. Familiarity

You know your banker, and you can easily walk in or call the loan officer if you need something.

2. Lower closing costs

Banks will cover many costs such as appraisals or other administrative costs (Talk to your bank for more information).

3. Home equity lines of credit

If you are looking at starting a business or doing a home improvement you cannot beat the rates of a home equity line of credit.

4. Free perks

You can get free banking, cash back, or free safety deposit boxes by having your mortgage with a traditional bank.

5. Overall more personalized service 

Your bank knows your credit history, so they may not need the amount of paperwork that a mortgage broker requires.  They can also offer you personalized services, such as a line of credit, that are based on your previous borrowing history.

6. Competitive rates

Many banks can and will lower their rates to match a mortgage broker quote. The pool of banks that brokers have access to has shrunk since 2007, when Bank of Montreal, Canadian Imperial Bank of Commerce, ING and others began exiting the independent broker market. Those banks feel they can profit more by selling mortgages directly to customers, and this is reflected in their rates.

7. Some mortgage brokers send their business to the same 3 firms over and over again.

Independent research firm Maritz Research found that 90 per cent of the typical broker’s volume goes to just three lenders. That’s partly because some brokers feel more comfortable in knowing a few lenders well, versus dealing with many lenders superficially. It’s also because brokers often get preferential rates and service – like better turnaround time – from their primary lenders.

Make sure you do your homework, and like any major investment, get at least 3 quotes. This will ensure that you are getting the best value, rate and service for your money. Your mortgage, like your home, has to suit your personality for the long run. You are developing a long-term relationship and you need to make sure it is the best fit for you and your family’s needs.

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