For most standard residential mortgages in Calgary, a mortgage broker does not charge the borrower a fee. The broker is paid a commission by the lender that funds your mortgage. A broker fee can apply on some private or alternative files, where the lender does not pay enough to cover the work, and any such fee must be disclosed to you in writing before you proceed.
I'm Jay Singh, a Calgary mortgage broker, and "how do you get paid?" is the question I'd want answered before hiring anyone. This post explains the money side honestly, including the parts brokers don't always volunteer: clawbacks, fees on private files, and how to check that your broker is properly licensed.
Is a Mortgage Broker Free?
For prime (A-lender) mortgages, it is usually free to you. You pay the same lender rate that you would be quoted directly, or in many cases a better one, and the lender pays the broker out of its own budget. There is no separate bill from the broker.
"Free" has two caveats:
- The cost is built into the industry, not hidden in your rate by the broker. Lenders pay commissions on brokered deals because it is cheaper than running branches and sales staff. That does not mean every lender prices the same, so comparing across lenders is the point of using a broker.
- Some files carry fees. More on this below.
How Do Mortgage Brokers Get Paid?
Lender-Paid Commissions
On most purchases, renewals and refinances placed with A and B lenders, the lender pays the broker a commission, generally calculated as a percentage of the mortgage amount. The exact amount varies by lender, product and volume, and it is not paid by you.
Brokers may also receive volume-based compensation from lenders. A good broker should be able to explain how they decide which lender to recommend and should be able to show you comparisons, not just one option.
Broker Fees on Private and Alternative Files
Private lenders and some alternative lenders pay brokers little or nothing, and the files take much more work. In those cases, a broker may charge a fee, often a percentage of the loan amount, and sometimes in addition to a lender fee. For example, our guide to private mortgages in Alberta discusses how these costs stack up.
If a fee applies, you should expect:
- A clear written disclosure of the fee before you commit and before any work begins
- The amount and when it is payable
- What you receive for it (lender search, application, negotiation, closing support)
- What happens if the deal does not close
If a broker cannot explain the fee clearly, ask again or look elsewhere.
Do Brokers Charge for Pre-Approvals?
A standard mortgage pre-approval from a licensed broker should not carry a fee. Be cautious of any upfront fee for a service that is normally lender-paid. See our pre-approval process guide and pre-approval service.
What Is a Clawback?
When a lender pays a broker a commission, there is normally a clawback period. If you pay out or break the mortgage early, typically within a certain window such as the first 30 days to a couple of years depending on the lender, the lender can reclaim part or all of the commission from the broker.
Why does this matter to you?
- A reputable broker absorbs the clawback. It's their business risk. You should not be billed for it unless the written agreement with you clearly says so.
- Ask whether your broker's agreement with you includes any clawback provision. If it does, you want it in writing and in plain language.
- It's another reason to be honest about your plans. If you expect to sell or refinance within a couple of years, tell your broker upfront so they can choose a suitable product. Early exit penalties from the lender are separate, and you can read about them in our guide on breaking your mortgage early.
Is a Mortgage Broker Regulated in Alberta?
Yes. Mortgage brokers in Alberta are licensed through the Real Estate Council of Alberta (RECA). Brokers and associate brokers work under a licensed brokerage and must follow RECA's rules and standards of practice. RECA keeps a public registry that lets you look up whether a person or brokerage is licensed.
Before you hand over personal documents, I recommend that you verify your broker's licence on RECA's public registry. It takes a couple of minutes and shows whether the licence is active and under which brokerage. If you cannot find the person, ask them directly for their licence details.
Licensing tells you the person is authorized to work as a mortgage broker in Alberta. It does not by itself tell you they are the right fit, so also use the checks below.
Mortgage Broker vs Bank
| Mortgage broker | Bank | |
|---|---|---|
| Lenders offered | Many, including banks, credit unions, monolines, alternative and private lenders | One (its own products) |
| Who pays | Usually the lender; fees possible on private files | Built into the bank's pricing |
| Advice | Comparison across lenders | Products from that institution only |
| Best for | Comparing options, complex files, self-employed, credit challenges | Convenience, existing banking relationship |
| Rate | Access to broker-channel rates; often competitive | Posted and negotiated rates |
Neither is automatically cheaper in every case, which is why it helps to check both. Banks sometimes match or beat broker rates, especially on renewals. For a full side-by-side, see our post on bank vs mortgage broker in Calgary, and compare current pricing on the Calgary mortgage rates page.
Mortgage Broker Reviews: What to Check
Online reviews are useful, but they are only one piece of the picture. When you read mortgage broker reviews, look for:
- Specifics, not just stars. Reviews that describe the situation, the timeline and how problems were handled are more credible than short generic praise.
- A pattern over time. A steady stream of recent reviews says more than a burst of reviews on one day.
- How the broker responds to criticism. Professional, calm replies are a good sign.
- Reviews that match your situation. If you are self-employed or buying your first home, look for people with similar files.
- Licensing and complaints. Check the RECA registry. Reviews do not replace this.
- Where the reviews are posted. Google Business Profile reviews are tied to a real listing; testimonials on a broker's own website are curated.
Questions to Ask Any Mortgage Broker
Use this checklist in your first conversation:
- Are you licensed with RECA, and under which brokerage?
- How do you get paid on this deal? Will I pay anything?
- If a fee applies, can I have it in writing before I commit?
- Which lenders do you work with, and why are you recommending this one?
- Can I see at least two or three options with total costs?
- What are the prepayment penalty rules and portability on this product?
- Is there a clawback or any condition in your agreement with me?
- What happens at renewal, and will you contact me ahead of it?
- How fast do you respond, and who handles my file day to day?
A good broker welcomes these questions.
When Does Using a Broker Make the Most Difference?
- Your file is not straightforward: self-employed, new to Canada, recent credit issues, rental income. See self-employed mortgages.
- You are buying your first home and want help sequencing pre-approval, programs and closing costs. See first-time buyers.
- A bank said no or a deal is in trouble. Our deal rescue work often involves alternative or private lenders.
- You want to compare, not just accept, your bank's renewal offer. Use the mortgage payment calculator to see what a rate difference means in dollars.
FAQ
Q: Do mortgage brokers charge fees in Calgary? A: On most A and B lender mortgages, the lender pays the broker and you pay no broker fee. On some private or alternative files, a broker fee may apply, and it should be disclosed to you in writing before you commit.
Q: How do mortgage brokers get paid? A: Mostly through a commission paid by the lender that funds the mortgage, usually calculated as a percentage of the loan amount. The amount varies by lender and product and is not an extra charge on your mortgage statement.
Q: Is a mortgage broker cheaper than a bank? A: Not always, but a broker can compare many lenders at once, which often finds a better rate or structure. Banks can be competitive too, so it is worth getting both a broker comparison and your bank's offer.
Q: How do I check that a mortgage broker is licensed in Alberta? A: Search for the person or brokerage on the Real Estate Council of Alberta (RECA) public registry. You can also ask the broker for their licence information directly.
Q: What happens if I break my mortgage early after using a broker? A: You owe the lender a prepayment penalty under your mortgage contract, and the lender may claw back some of the broker's commission. A reputable broker handles the clawback themselves unless your written agreement says otherwise.
Final Thoughts
For most Calgarians, using a mortgage broker costs nothing out of pocket, and the value is in comparison, structure and advice. The key protections are simple: confirm licensing on the RECA registry, ask how your broker is paid, and get any fee in writing before you commit.
Have questions about how I work or what your mortgage might cost? Contact Jay: jaysinghmortgage@gmail.com or 403.409.1126.
