What is the difference between Canadian big banks, mortgage brokers and credit unions?
A different niche, a different lender
Canadian big banks, mortgage brokers, and credit unions are all financial institutions that offer a variety of financial products and services to their customers.
But there are some key differences between them.
Canadian big banks
These are the largest financial institutions in Canada, with branches and ATMs located throughout the country.
They offer a wide range of financial products and services, including savings accounts, chequing accounts, credit cards, loans, mortgages, and investment products.
Big banks are typically for-profit organizations that aim to generate profits for their shareholders. They offer competitive interest rates, an institution specific suite of products and unfortunately, offer some of the most onerous mortgage conditions.
A quick Google search such as ‘canadian big bank mortgage penalty lawsuits’ will give you an idea of what I mean.
Mortgage brokers
Mortgage brokers are independent professionals who act as intermediaries between borrowers and lenders.
They work for the client applying to multiple lenders to find the best mortgage product and interest rate for their clients.
Mortgage brokers are typically paid by the lenders, and their services are free to borrowers.
Credit unions
Credit Unions are not-for-profit financial cooperatives that are owned and operated by their members.
Credit unions offer many of the same products and services as big banks, including savings accounts, chequing accounts, credit cards, loans, and mortgages.
However, credit unions are member-owned and focus on providing personalized service and lower fees than big banks.
The Best of All Worlds
Mortgage brokers, like Huber Mortgage, work with all lenders. In fact, we have access to over 50 lenders:
- big Canadian banks
- local credit unions
- fair fee mortgage companies or monolines
- B or alternative lenders
- and private or MIC lenders
Each of these lenders has strengths and each fits a certain niche of the mortgage market.
When a mortgage broker considers which lender would be best for you, they will consider the following criteria:
- which lender will accept your income and income documentation
- which lender will accept the type of home you are purchasing or refinancing
- which lender will accept the source of your down payment funds
- which lender will accept your credit situation
There are additional criteria for specific situations but these are the main considerations.
Conclusions and Further Thoughts
In summary, Canadian big banks are large for-profit institutions that offer a wide range of financial products and services.
Mortgage brokers are independent professionals who help borrowers find the best mortgage product and interest rate.
Credit unions are not-for-profit financial cooperatives that are owned and operated by their members, and offer many of the same products and services as big banks, but with a focus on personalized service and lower fees.
When you start looking for your mortgage, please call Huber Mortgage so we can help you find the best mortgage for your situation.
Sincerely,
Michael
PS – One of my hobbies is blogging about mortgages, debt and government policy. During the day I’m a MORTGAGE BROKER in Kelowna, BC!
Check out the Huber Mortgage Home Buyers Guide HERE
