Questions to Ask Your Mortgage Broker in Canada (and Red Flags to Watch For)

Why These Questions Matter

A mortgage is likely the largest financial commitment of your life. A good mortgage broker can save you tens of thousands of dollars and protect you from expensive structural mistakes. A bad one can put you in the wrong mortgage for the wrong lender.

Most borrowers do not know what to ask — they rely on their broker to guide the conversation. This guide flips that. Ask these questions before signing anything. A competent, ethical broker will have clear answers. Evasion or annoyance at these questions is itself useful information.

Before You Start: Vetting Questions

Ask before sharing any financial documents:

1. "How many lenders do you have access to?" A good answer: 25 or more. Any broker worth working with should be comparing you across a meaningful number of lenders, not just the 3–4 they always use.

2. "Are you licensed, and what is your license number?" Any licensed broker or agent will provide this immediately. Verify it in your province's public registry (see our guide on verifying broker licenses).

3. "How long have you been originating mortgages?" Experience matters for complex deals. For straightforward purchases, even a newer broker may be fine. For self-employed income, B-lender situations, or complex properties, you want experience.

4. "Do you specialize in any particular type of mortgage or borrower?" Some brokers specialize in self-employed clients, newcomers to Canada, B-lender deals, or commercial properties. If your situation is complex, a specialist may serve you better.

About Compensation and Conflicts of Interest

Ask before they start working on your file:

5. "How are you compensated for arranging my mortgage?" Expected answer: "The lender pays me a finder's fee when your mortgage closes. For this type of deal, it will be approximately [X]%. You do not pay me directly." If they are also charging you a fee, that needs to be disclosed upfront.

6. "Do you receive volume bonuses from any lenders?" This is the uncomfortable but important question. A transparent broker will acknowledge that volume agreements exist and explain how they manage that conflict. Evasion is a red flag.

7. "If you are showing me one lender, why not another?" Anytime a broker presents one option as the clear winner, ask them to show their reasoning. Which other lenders did they consider? What eliminated them? This gives you a window into whether they genuinely shopped for you.

About Rates and Lender Selection

Ask when they present your options:

8. "What is the qualifying rate vs the contract rate?" Under the Canadian stress test (OSFI B-20), you qualify at max(contract rate + 2%, 5.25%). The broker should be able to explain this clearly and confirm which rate applies to your situation.

9. "Is this the best available rate from all your lenders today?" A direct question deserves a direct answer. If they say yes, ask how many lenders they compared.

10. "What is the rate hold period, and is it confirmed in writing?" A rate hold locks in today's rate for 90–120 days while your deal progresses. This matters in a rising rate environment. Get it in writing.

11. "Is the lender you're recommending currently offering any rate incentives or promotions?" Lenders run promotional rates periodically. A good broker stays on top of this.

About the Mortgage Structure (These Matter More Than the Rate)

Ask before you choose a product:

12. "Is this a collateral charge or a conventional charge?" This is critically important and most borrowers never ask. A collateral charge (used by TD and many monoline lenders) registers the mortgage at a higher amount than you actually borrowed, making it easier to re-advance funds later — but it also makes switching lenders at renewal more expensive and complicated.

A conventional charge registers the exact mortgage amount, making it easier and cheaper to switch lenders at renewal without paying a lawyer to discharge and re-register.

13. "What is the penalty for breaking this mortgage early?" Breaking a fixed-rate mortgage before the term ends triggers an Interest Rate Differential (IRD) penalty, which can be very expensive at major banks. Ask for a best-case and worst-case estimate in dollars based on your mortgage amount and term.

14. "What are the prepayment privileges?" Most Canadian mortgages allow you to pay 10%–20% of the original balance as a lump sum each year, and to increase your regular payment by 10%–20%. Higher prepayment privileges reduce your lifetime interest cost if you plan to pay down the mortgage faster.

15. "Is this mortgage portable?" If you sell and buy a new property before your term ends, a portable mortgage lets you take your rate with you to the new purchase, avoiding a prepayment penalty. Not all mortgages are portable.

About the Process

Ask so you know what to expect:

16. "What documents do you need from me?" Be prepared to provide: T4s and NOAs (Notice of Assessment) for the last 2 years, recent pay stubs, bank statements showing down payment, purchase and sale agreement (if applicable), and photo ID. Self-employed borrowers need additional documentation.

17. "How long will approval take?" For a well-prepared file with an A-lender: 24–72 hours for a commitment letter. More complex deals or B-lenders may take longer.

18. "Who handles my file if you are unavailable?" A good brokerage has coverage for their brokers. Ask who your backup contact is if your broker is sick or on vacation during the critical period before closing.

Red Flags: When to Walk Away

Serious red flags that warrant finding a different broker:

• Promises guaranteed approval before reviewing any documents. No one can guarantee a mortgage without seeing your financials, credit, and property details.

• Suggests misrepresenting income, employment, or the intended use of the property. This is mortgage fraud. A licensed broker who suggests this should be reported to the provincial regulator.

• Charges an upfront fee (before your mortgage closes) on a standard A-lender deal. Brokers are paid at closing on standard deals. An upfront fee for a purchase at a major bank is not normal.

• Cannot provide a license number or is evasive about their licensing.

• Rushes you to sign without explaining terms. Legitimate brokers want you to understand what you are signing.

• Only presents one lender without explaining why others were not considered.

• Quotation does not match the commitment letter. Always compare the numbers you were quoted against the formal commitment from the lender.

Green Flags: Signs of a Good Broker

Signs you are working with a professional who is acting in your interest:

• Proactively discloses their license number and compensation structure • Presents 2–3 lender options with explanations of the tradeoffs • Spends time explaining mortgage structure (collateral vs conventional, penalties, prepayment) • Provides a formal pre-approval letter from an actual lender, not just a broker's estimate • Is upfront about what can change between pre-approval and final approval • Follows up proactively as your deal progresses toward closing • Is reachable and responsive during the closing period • Asks questions about your plans (how long do you plan to keep the property? Do you expect income changes?) to find the best structural fit, not just the lowest rate