The primary reason our mortgage marketplace is as competitive as it is, is because of mono-line or non bank lenders. These are lenders who are neither owned nor affiliated with the big banks, do nothing but mortgages and who compete ‘tooth and nail’ with the banks for mortgage market share.

We have 47 different lenders, with 43 of them (including credit unions) being non-bank institutions. They are highly regulated, capitalized and secure entities, most of whom have been in business for  many years. To be successful, they have had to offer better rates, products, terms and service. In short, non-banks keep the big banks on their toes. Without non-banks who take a more common sense approach, getting a mortgage from the banks would be more difficult. And without this competition, you would pay more. End of story.

As far a mortgage rate is concerned, we offer you (through the non-bank lender) the best rate from the get go. We don’t do the big ‘dance’ by  offering you a higher, more profitable rate (in the hope that you won’t shop around) and only reduce it when you take your business elsewhere.

The non-banks pay us a ‘finder’s’ or origination fee for generating and packaging the mortgage application, submitting it to them, being the interface between them and the consumer.  They also rely on us as mortgage experts to provide professional counsel and advice.  Accordingly, non-bank lenders can operate with lower overhead without the branch networks which the big banks rely on.

If your banker, or anyone for that matter tells you that the non-bank lenders may go out of business or operate in the ‘B’ business category, (non-prime mortgage), this is false. Most non-banks do only AAA business just like the big banks, while a few do non-prime, fee based mortgages at higher rates. There were no casualties of non-bank AAA lenders during the recent financial meltdown, and in fact if any mortgage lender in Canada were to ‘close down’ the consumer is fully protected and their mortgage would continue to be administered and unaffected . So in fact there are nothing but positives to us placing you with a non-bank lender.

While we do send some business to the big banks, we overwhelmingly support non-bank lenders. Arguably, you should too (via mortgage professionals like us) because ultimately you  the consumer benefit in a big way. A worse case scenario would be, that Canadians could only obtain a mortgage from a big bank with no other choice. In that case, the banks would have a virtual monopoly as is now the case in Australia. Bottom line? We all need the non-bank mortgage lenders.