If you are buying a home, hiring help, or thinking of a career in mortgages in Ontario, you will hear the terms mortgage agent level 1 and mortgage agent level 2 a lot. Those labels matter.
They tell you what the person across the table can do, which lenders they can access, and how much experience and training they are likely to have. If you have ever wondered about Mortgage Agent Level 1 vs Level 2 Canada, this guide breaks it down in plain language.
This guide explains the difference in plain language, shows concrete examples from real life, includes official FSRA numbers about how many agents there are, and gives advice for borrowers and for people who want to work in the industry.
Key quick facts up front
As of August 1, 2024, FSRA licensed 2,925 mortgage brokers, 5,203 level 2 mortgage agents, and 9,937 level 1 mortgage agents in Ontario. These figures give you a sense of the size and structure of the market.
Level 2 agents are explicitly authorised to deal with private and alternative lenders in addition to traditional lenders. That expanded scope is the main practical difference between the two levels.
FSRA continues to increase supervision and enforcement activity across the mortgage brokering sector, so licensing, disclosure, and continuing education rules are important.
Now let us unpack what those numbers and rules mean for you.
What are mortgage agent levels and why were they introduced?
Ontario reorganised mortgage licensing so that mortgage agents are split into levels. That change was driven by two goals.
First, consumers needed clarity. Before the change it was hard for a borrower to know whether the person they were dealing with had basic training or a lot of experience and access to private lending.
Second, private lending had grown and it carries different risks. Regulators wanted to make sure only licencees with the right training could arrange higher risk or non standard financing.
The result is a clear ladder:
Mortgage Agent Level 1: entry level. Works with institutional lenders such as banks and credit unions.
Mortgage Agent Level 2: experienced or advanced agent. Works with Level 1 lenders and also with private lenders, mortgage investment companies, syndicates and other non standard lenders.
After time and experience, an agent can move to a Mortgage Broker licence and supervise others.
Those levels are not just labels. They shape what solutions an agent can offer to borrowers and what training the agent must complete.
Concrete Definitions: what Level 1 and Level 2 mean in practice
Level 1 and Level 2 may sound like simple labels, but in the mortgage world they define exactly what an agent can and cannot do for you. Let’s break down what these levels really mean in practice.
Mortgage Agent Level 1
Typically newly licensed agents who completed the Level 1 course and meet FSRA’s licensing requirements.
Can arrange mortgages with banks, credit unions, trust companies and monoline institutional lenders.
Well suited for borrowers with common, straight forward situations: stable employment, standard debt to income ratios and traditional down payments.
When to choose a Level 1 agent
You have a salaried job or stable pay and a clear credit history.
You are looking for a standard insured mortgage or conventional bank product.
You want a simple, reliable route to pre approval and closing.
Mortgage Agent Level 2
Completed Level 2 course and licensing. Level 2 agents are authorised to deal with the broader set of mortgage lenders including private lenders, mortgage investment companies and syndicates.
Able to structure more creative or bridge type solutions where borrowers do not fit bank standards.
Expected to understand alternative lender pricing, risk profiles and additional disclosure obligations.
When to choose a Level 2 agent
You are self employed and have income that is hard to prove by traditional statements.
You are a newcomer to Canada with strong assets but no Canadian credit history.
You need a short term bridge or private mortgage to close a purchase or carry renovations until refinance is possible.
FSRA numbers and why they matter
FSRA’s sector supervision materials provide a snapshot of how the industry is structured. As of August 1, 2024, FSRA reported:
That shows two things. First, there are many more Level 1 agents than Level 2 agents, which makes sense because Level 1 is the gateway into the profession. Second, Level 2 agents form a sizable specialized group who handle the trickier deals.
The private lending report and FSRA’s licensing and enforcement reports also note that Level 2 agents are the ones authorised to work with private and alternative lenders and that the regulator is paying close attention to market conduct and suitability as this sector grows.
These numbers matter for borrowers because they affect supply and competition. If most agents are Level 1, then institutional lenders will have a steady flow of business.
If demand for private lending grows, the relative shortage of Level 2 licensees could mean fewer experts to navigate those options. That is why larger brokerages invest in training to move agents up to Level 2.
Side by side comparison: Mortgage Agent Level 1 vs Level 2 Canada
It’s easier to see the difference when you put them next to each other. Here’s a clear side-by-side look at what Level 1 and Level 2 mortgage agents can actually do.
This table should make it obvious that level matters. An agent’s licence level changes the toolbox they bring to a mortgage problem.
Three real case studies you can use
I gathered three short case studies to show how the levels work in real scenarios. These are realistic composites based on industry patterns and FSRA guidance rather than individual named client files.
Case study 1: the newcomer with savings
Situation: Priya is a new permanent resident. She has CAD 150,000 for a down payment but no Canadian credit history. She wants to buy a condo in Mississauga.
Level 1 outcome: The Level 1 agent tries the big banks. Most ask for a Canadian credit history and proof of employment longer than a few months. The banks either decline or ask for large down payments and higher rates.
Level 2 outcome: A Level 2 agent places the file with a credit union and a private lender that will accept the large down payment and consider her overseas credit and current employment offer letter. The client gets a short term mortgage at a slightly higher rate but closes. Six months later Priya has Canadian credit and refinances to a bank product.
Lesson: Level 2 access to alternative lenders can turn a no into a yes for newcomers.
Case study 2: the self employed contractor
Situation: Marco is self employed and reports low net income after deductions even though bank statements show steady deposits. He needs financing to buy an investment property.
Level 1 outcome: The Level 1 agent places with the bank and the application is declined because the debt service ratios do not meet bank stress test and documented income is low.
Level 2 outcome: A Level 2 agent structures a deal with a mortgage investment company using bank statements and asset strength instead of tax net income. The mortgage is for a shorter term at a higher rate, enabling Marco to close. Later, after two years of stronger reported income, he refinances to an institutional product.
Lesson: Level 2 agents can match borrowers to lenders that use different underwriting criteria.
Case study 3: short bridge for renovation
Situation: Leah is buying an older home she intends to renovate heavily. The purchase price reflects needed repairs. A traditional bank mortgage would not cover renovation draws.
Level 1 outcome: A Level 1 agent finds a bank mortgage but it does not fund renovation draws. Leah cannot proceed.
Level 2 outcome: A Level 2 agent arranges a short term private mortgage that includes renovation funding and structured payments. Once renovations are complete and the property appraises higher, Leah replaces the private mortgage with a conventional bank mortgage at a lower rate.
Lesson: Level 2 authority is useful when the deal requires creative structuring and staged funding.
What the regulator watches and what that means for you
FSRA’s reports show active supervision, enforcement and market conduct reviews for the mortgage brokering sector. The annual and enforcement reports show the regulator focusing on suitability, disclosure and continuing education.
That matters because private and alternative lending creates extra obligation to make sure a loan is suitable for the borrower and fully disclosed.
If you are a borrower, this means:
Ask about licence level. It is reasonable to ask whether the agent is Level 1 or Level 2 and how long they have been licensed.
Request full disclosure about fees, rates and the risks of private lending.
Expect that Level 2 agents will need to document why an alternative solution is appropriate.
If you are an aspiring agent:
Understand that Level 2 comes with more opportunity but also more responsibility.
Keep up with FSRA education requirements and sector supervision updates.
Expect more scrutiny on conflicts of interest, suitability assessments and disclosure when you work with private lenders.
Must Check: HELOC vs Refinancing vs Mortgage
How to choose between a Level 1 and Level 2 agent as a borrower?
Here are practical steps to pick the right person:
Start with the problem
Are you a standard borrower or do you have a non standard situation? If your finances are straightforward, Level 1 is fine. If not, look for Level 2 experience.
Ask directly
“Are you Level 1 or Level 2 licensed?” If they say Level 2, follow up: “How many private or alternative deals have you placed this year?”
Request references
Ask for examples of similar clients they have helped. Good agents share anonymised examples and explain why a given lender was a fit.
Check the brokerage
Even Level 2 agents work under brokerages. Make sure the brokerage has adequate compliance resources and experience placing similar deals.
Compare cost and risk
Private lending can solve problems but at a higher price. Make sure you understand the exit strategy and the refinance plan.
For people entering the profession: the path and the courses
If you want to work in this field, the practical path often looks like this:
Take the Level 1 mortgage agent course from an FSRA approved provider and get licensed.
Gain on the job experience under a brokerage.
Take the Level 2 mortgage agent course and upgrade your licence when you are ready to handle private and alternative deals.
After at least 24 months of licensed agent experience, you may qualify to apply for a mortgage broker licence and to supervise agents. FSRA provides transition guidance and resources on licensing changes.
FSRA also shares sector guidance and e-blasts to keep agents up to date. If you plan to build a career, be ready for ongoing education and close supervision.
Common questions and short answers
What is mortgage agent level 2 meaning?
What is mortgage agent level 2 course?
A course approved by FSRA that covers private lending, suitability, disclosures and risks beyond what Level 1 requires. Successful completion is a licensing prerequisite.
How many mortgage agents are Level 1 vs Level 2?
As of August 1, 2024, FSRA reported 9,937 Level 1 agents and 5,203 Level 2 agents in Ontario. That shows the profession has a large entry level cohort and a significant number of more advanced practitioners.
Are there mortgage broker levels?
Yes. The progression is agent Level 1 to agent Level 2 to mortgage broker. Brokers supervise agents and have additional responsibilities and qualifications.
Final thoughts and practical advice
If you are a borrower, do not be shy about asking whether the person you are dealing with is Level 1 or Level 2. The licence level is not a measure of personality or niceness. It is a measure of the solutions they can access.
If you are hiring help for a non standard purchase or if you need short term funding, prioritise a Level 2 agent with proven experience and spoken examples of similar deals. Make sure you understand the trade offs: private loans may be more expensive but they buy time and flexibility.
If you are starting out in the field, begin with Level 1, learn the business and then upgrade to Level 2 when you have enough deals under your belt. That path builds practical experience and gives you the chance to understand risk and suitability before you work with private lending.
The sector is regulated and FSRA’s recent supervision and enforcement activity shows regulators are serious about suitability, disclosure and consumer protection. That is good for borrowers and it raises the bar for agents who want to do the right thing.
Sources and further reading
FSRA Mortgage brokering sector Supervision Plan 2024–25. Key licensing numbers and sector snapshot. FSRA Ontario
FSRA Private Residential Mortgage Lending in Ontario Report 2024. Details on Level 2 authority and private lending. FSRA Ontario
FSRA Licensing and Market Conduct Enforcement Report 2022–2024. Enforcement focus on suitability and disclosure. FSRA Ontario
FSRA Annual Report 2023–24. Sector oversight and market conduct statistics. FSRA Ontario
