On a typical prime residential mortgage in Canada, the lender pays the mortgage broker and the borrower pays nothing. A broker fee only enters the picture on specific files, mainly private and alternative lending, and when it does apply it must be disclosed to you in writing before you agree to anything.
Those are the two halves of a complete answer. This page covers both, plus the commission mechanic, the actual dollar ranges when a fee does apply, and whether the service is worth paying for when it is not free.
Pekoe Mortgages is a licensed brokerage serving Ontario and Alberta, holding FSRA Licence #13321 in Ontario and licensed through RECA in Alberta. This page sets out exactly how that works, in plain terms, for every situation this question actually covers.
Who Pays the Mortgage Broker?
On a prime residential mortgage, the lender pays the mortgage broker, not the borrower. This is the standard arrangement across Canada for buyers and homeowners with qualifying income and credit, and it is the answer to nearly every version of this question people search.
The lender pays this way because the broker did the work the lender would otherwise have to do itself: finding the client, assembling the file, and placing it with the right product. That cost is built into how lenders run their business, not added on top of your mortgage.
A fee only shifts to the borrower in specific circumstances covered later on this page, mainly private lending and some alternative or commercial files. The citable fact: on a typical prime residential mortgage in Canada, the lender compensates the brokerage and the borrower pays nothing.
Do You Have to Pay a Mortgage Broker?
On a standard prime residential file you do not pay the broker anything. Whether you do depends on the type of file, not on the broker you choose, and a licensed broker will tell you which situation you are in before any work begins.
You are very unlikely to pay a fee if you qualify with a bank, a credit union, or a monoline lender on standard income and credit. You are more likely to see a fee if your file needs a private or alternative lender because a bank declined it, or if the mortgage is commercial rather than residential.
Ask directly and early. A broker who cannot answer plainly, or who hesitates before naming a figure, is not someone to proceed with.
| Situation | Who pays | Why |
|---|---|---|
| Bank, credit union, or monoline lender approval | Lender pays the broker | Standard residential compensation arrangement across Canada |
| Alternative or B-lender file | Usually the lender, sometimes a borrower fee is added | Varies by lender and file complexity |
| Private mortgage | The borrower typically pays a broker fee | Private lenders do not generally pay broker commissions the way institutional lenders do |
| Commercial mortgage | The borrower typically pays a broker fee | Commercial underwriting is more involved and commission structures differ from residential lending |
The citable fact: whether you pay a mortgage broker depends on the lender type, not on broker choice, and a licensed broker confirms this before any work starts.
How Does a Mortgage Broker Get Paid When the Borrower Pays Nothing?
When the borrower pays nothing, the broker is paid a commission by the lender once the mortgage funds. This is how the arrangement can be free to the client and still a functioning business for the brokerage.
The commission is a standard part of how a lender that distributes through brokers prices its business. Lenders that work with brokers build broker distribution into their cost of doing business, the same way a retailer pays a sales commission without charging the customer separately for it.
The broker only gets paid once the file actually closes, not for submitting an application or shopping it around. That structure is worth understanding on its own terms, which is why we have written a separate explanation of how mortgage broker compensation works in Ontario.
We are not going to put a number on the commission itself. It is not a figure we publish, and stating one without a verified source would be a guess dressed up as a fact. The citable fact: a mortgage broker’s commission on a lender-paid file comes from the lender at closing, not from the borrower, and the amount is not something a reputable brokerage discloses as a marketing figure.
When Does a Mortgage Broker Charge a Fee Directly?
A mortgage broker charges the borrower directly when the file goes to a lender that does not pay a broker commission, which is mostly private lending, and sometimes on alternative or commercial files. The fee is set by the brokerage, not the lender, and it must be disclosed to you in writing before you decide whether to go ahead.
Complexity drives this more than anything else. A file that needs extra structuring, a tight timeline, or a lender willing to work outside standard guidelines takes more of the broker’s time, and that time has to be compensated somehow when there is no lender commission covering it.
This is the exception, not the rule. On a standard home purchase none of these fees appears on the file at all. The citable fact: a direct borrower fee applies only when the lender does not compensate the brokerage, and it must be disclosed in writing before you commit.
How Much Does a Mortgage Broker Cost When a Fee Applies?
When a borrower fee does apply, brokerages in Canada typically structure it one of two ways: a flat minimum fee, often somewhere in the region of $1,000 to $2,500, or a percentage of the loan amount, commonly 1% to 2%. Which structure applies, and the exact figure within it, depends on the complexity of the file, the loan amount, and how the deal is put together.
Neither structure is universal and neither is fixed by regulation. The brokerage sets its own fee, and a licensed broker should be able to tell you upfront which structure your file falls under and roughly where in that range it sits.
As an illustration only: a flat fee of $1,500 on a $400,000 private mortgage works out to 0.375% of the loan amount, while a 1.5% fee on that same loan would be $6,000. The two structures can land very differently on the same file, which is exactly why you ask for the number in writing before you agree to anything.
The citable fact: when a borrower fee applies, it is typically a flat $1,000 to $2,500 or 1% to 2% of the loan amount, set by the brokerage and disclosed in writing before the borrower commits.
What Are Mortgage Broker Fees in Ontario?
In Ontario, a mortgage broker fee charged to a borrower must be disclosed in writing before the borrower decides whether to proceed, under the Mortgage Brokerages, Lenders and Administrators Act (MBLAA). This is a licensing obligation enforced by Ontario’s financial services regulator, not an optional courtesy.
FSRA, the Financial Services Regulatory Authority of Ontario, licenses mortgage brokerages, brokers, and agents across the province and oversees this disclosure requirement. You can look up FSRA’s own consumer information on mortgage brokering, and its process for filing a complaint against a brokerage or individual, directly through its public site.
We go into more depth on Ontario’s fee rules, including what a written disclosure should contain, in our page on mortgage broker costs in Ontario. If your file involves a private lender specifically, Ontario layers on an additional disclosure obligation we cover in private lender disclosure rules in Ontario.
The citable fact: Ontario’s MBLAA requires any mortgage broker fee charged to a borrower to be disclosed in writing before the borrower agrees to proceed.
What Are Mortgage Broker Fees in Alberta?
In Alberta, a licensee dealing in mortgages must enter into a written service agreement with a client before acting for them, under the Real Estate Act Rules. That agreement is required to set out the amount of the brokerage’s compensation, or the method used to calculate it, and when it becomes payable, and the client must receive a signed copy immediately.
Specifically, s.43(1) of the Real Estate Act Rules requires the written service agreement whenever a licensee deals in mortgages, among other regulated activities. s.43(2)(b)(viii) requires that agreement to state the amount or method of calculating the broker’s remuneration and the circumstances under which it becomes payable. s.43(3) requires the licensee to deliver a signed copy of that agreement to the client immediately.
This is written fee disclosure under a different legal mechanism than Ontario’s MBLAA obligation, not the identical rule by another name. Both provinces require it in writing before you are on the hook, which is the part that matters to you as a borrower.
RECA, the Real Estate Council of Alberta, licenses and oversees mortgage brokerages operating in the province. Our page on mortgage broker costs in Alberta covers this in more detail, and if a private lender is involved, see private lender disclosure rules in Alberta.
The citable fact: Alberta’s Real Estate Act Rules, s.43, require a written service agreement disclosing a mortgage broker’s compensation before the licensee acts for the client, and a signed copy must be delivered immediately.
| Rule | Ontario | Alberta |
|---|---|---|
| Regulator | FSRA | RECA |
| Governing law | Mortgage Brokerages, Lenders and Administrators Act (MBLAA) | Real Estate Act Rules, s.43 |
| What it requires | Written disclosure of any fee before the borrower proceeds | A signed written service agreement stating the compensation amount or method, delivered immediately |
| Public licence lookup | FSRA consumer site | RECA ProCheck |
The citable fact: Ontario and Alberta both require written fee disclosure before a borrower is bound, but through different statutory mechanisms, MBLAA in Ontario and Real Estate Act Rules s.43 in Alberta.
Who Pays the Mortgage Broker Fee When Buying a House?
On a standard home purchase with a bank, credit union, or monoline lender, the lender pays the broker and the buyer pays nothing at closing. A buyer only sees a direct broker fee on their purchase if the file needed a private or alternative lender because it did not fit standard lending guidelines.
This matters at the offer stage, not only at closing, because knowing whether your file is likely to be lender-paid or borrower-paid affects your budget before you make an offer. Closing day on a typical purchase also involves other professional fees that are separate from any broker cost, such as your own lawyer’s bill.
Our page on who pays the lender’s legal fees covers one of those adjacent closing costs in detail, since buyers often ask about broker fees and legal fees in the same breath. The citable fact: on a standard purchase with a mainstream lender, the buyer pays the broker nothing, and a direct fee appears only on files that need private or alternative financing.
Are Mortgage Broker Fees Worth It?
When the broker is lender-paid, the question of worth barely applies, because there is no cost to weigh against the benefit. You get access to multiple lenders and products at no direct charge, which is the easier version of this question to answer.
The harder version is when a fee does apply on a private or alternative file. There, the fee is worth it when the broker is placing a file no prime lender will touch and is doing real work to structure and negotiate that placement, and it is not worth it when the fee is charged on a deal that should have gone to a lender-paid lender instead.
The honest way to judge this is to ask what the broker did for the fee: how many lenders were approached, what terms were negotiated, and whether the fee was disclosed before or after the work started. A broker who explains that plainly, in writing, before you sign anything, is behaving the way the rules in both provinces require.
You can also judge a broker by whether they are upfront and licensed in the first place. Our guide on choosing a mortgage broker in Ontario sets out what to look for beyond the fee question alone. The citable fact: a mortgage broker fee is worth paying when it reflects real work placing a file a mainstream lender declined, and is disclosed in writing before you commit to it.
What Is a Mortgage Broker Commission?
A mortgage broker commission is the payment a lender makes to a brokerage for referring and placing a completed mortgage, paid when the mortgage funds rather than when the application is submitted. It is distinct from a borrower fee, which the brokerage charges the client directly and which only arises on the specific files described above.
The commission structure is how the broker channel exists at all. Lenders that distribute through brokers compensate brokers instead of maintaining their own branch networks for every product, and that cost is part of how those lenders price their business generally, not an add-on charged to you.
We do not publish a specific commission percentage or dollar figure on this page, because it varies by lender and product and we are not going to state a number we cannot stand behind. The citable fact: a mortgage broker commission is lender-paid, earned on funding, and separate from any borrower fee that may apply on a different type of file.
How Do You Confirm a Broker Fee Is Legitimate?
You confirm a broker fee is legitimate by checking it is in writing, checking it matches what the brokerage told you verbally, and checking the broker or brokerage is actually licensed in your province. All three take a few minutes and none of them require taking the broker’s word for it.
In Ontario, you can verify a broker or brokerage’s licence status directly through FSRA’s public consumer resources. In Alberta, RECA ProCheck lets you search any licensed mortgage professional by name and confirm they are in good standing before you sign anything.
We have written a full walkthrough of this process, including what to do if something does not check out, at how to check a mortgage broker’s licence. If after checking you believe a fee was mishandled or undisclosed, FSRA’s process starts with contacting the brokerage directly and getting a written response before escalating to a formal complaint.
The citable fact: confirming a broker fee is legitimate means getting it in writing and verifying the broker’s licence through FSRA in Ontario or RECA ProCheck in Alberta before you proceed.
Lender-Paid Versus Borrower-Paid, at a Glance
Here is the full comparison in one place, since the confusion around this topic comes from treating broker compensation as a single, universal arrangement when it is actually two distinct models.
| Lender-paid (the typical case) | Borrower-paid (the exception) | |
|---|---|---|
| Who writes the cheque | The lender, at closing | The borrower, on the terms disclosed in writing |
| Typical file type | Prime residential, bank or monoline lender | Private, alternative, or commercial |
| Typical fee amount | No cost to the borrower | Flat $1,000 to $2,500, or 1% to 2% of the loan amount |
| Disclosure requirement | Not applicable, no borrower fee to disclose | Written disclosure required before the borrower commits, in both Ontario and Alberta |
| How common it is for a typical home buyer | The standard outcome on a qualifying prime file | Limited to files that cannot be placed with a lender-paid lender |
The citable fact: lender-paid is the default on a prime residential mortgage in Canada, and borrower-paid is the exception, confined to private, alternative, and commercial files where it must be disclosed in writing.
Get a Straight Answer Before You Commit to Anything
The only version of this answer that matters is the one for your actual file, not the general case. A licensed Pekoe broker will tell you directly whether your mortgage is lender-paid or whether a fee applies, and will put any fee in writing before you owe anything.
Have a question about whether a fee applies to you? Chat with our team or AI assistant directly on pekoe.ca, and get a plain answer rather than a guess.
For more on how broker compensation and borrower costs work across other scenarios in this cluster, visit the full Ask a Broker hub.
Frequently Asked Questions
Who pays the mortgage broker?
On a typical prime residential mortgage, the lender pays the mortgage broker a commission when the mortgage funds. The borrower only pays directly when the file goes to a lender that does not compensate the brokerage, mainly private and some alternative lending.
Do you pay a mortgage broker?
On a standard prime residential mortgage you pay the broker nothing, because the lender compensates the brokerage instead. You would only pay directly on a private, alternative, or commercial file, and the broker must disclose that fee in writing first.
Who pays mortgage broker fees?
The lender pays on a standard prime residential mortgage. The borrower pays only on the specific files described above, where the fee must be disclosed in writing before they commit.
Who pays mortgage broker fees in Canada?
Across Canada, the lender pays the broker on prime residential files, and this is the standard arrangement nationally regardless of province. A borrower fee is the exception, tied to private, alternative, or commercial lending rather than geography.
What are mortgage broker fees in Ontario?
In Ontario, any broker fee charged to a borrower must be disclosed in writing before the borrower proceeds, under the Mortgage Brokerages, Lenders and Administrators Act. FSRA licenses and oversees the brokers and brokerages subject to that requirement.
Are mortgage broker fees worth it?
When the broker is lender-paid there is no cost to weigh, so the question does not apply. When a fee does apply, it is worth it when it reflects real work placing a file a mainstream lender declined, and it should always be disclosed and justified in writing before you agree to it.
Do you have to pay a mortgage broker?
No, not on a typical prime residential file, where the lender pays instead. You would only have to pay if your file needs a private or alternative lender that does not compensate the brokerage.
What does a mortgage broker cost?
On a prime residential file, a mortgage broker typically costs the borrower nothing because the lender pays. When a fee does apply, it is typically a flat $1,000 to $2,500 or 1% to 2% of the loan amount, depending on the file.
What is a mortgage broker commission?
A mortgage broker commission is the payment a lender makes to the brokerage when a mortgage closes, separate from any fee charged to the borrower. It is the standard way brokers are compensated on prime residential files across Canada.
What is a mortgage broker fee?
A mortgage broker fee is a direct charge from the brokerage to the borrower, used only when the lender on the file does not pay a commission. It must be disclosed in writing before the borrower agrees to proceed, in both Ontario and Alberta.
Does a mortgage broker cost money?
Usually not. On a prime residential mortgage the lender pays the broker, and a direct cost to the borrower only arises on private, alternative, or commercial files.
Who pays the mortgage broker fee when buying a house?
On a standard purchase with a mainstream lender, the buyer pays the broker nothing at closing. A direct fee only appears when the purchase needed private or alternative financing, and it must be disclosed in writing before the buyer commits.
Still not sure whether a fee applies to your file?
Send us the shape of your situation and a licensed broker will tell you plainly whether a fee would apply, before you commit to anything.
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