If you’re considering buying a home or refinancing your current mortgage, you’ve likely come across the terms mortgage agent vs mortgage broker. Though they sound similar, these two professionals play different roles in the mortgage process.
Understanding the differences between them can help you choose the right professional to guide you through your mortgage journey. This blog will explore the key differences, the roles each plays, and how they can help you achieve your real estate goals.
When you’re ready to buy a home or refinance your mortgage, choosing between a mortgage agent and a mortgage broker is an important decision. Both professionals can help guide you through the mortgage process, but they play different roles.
Knowing how they differ can help you decide which one best suits your needs. Let’s explore the key differences, the costs involved, and what to expect from each professional.
Mortgage Agent
A mortgage agent is a licensed professional who works for a mortgage brokerage. They help you find a mortgage, but they can only offer options from the lenders their brokerage works with.
Role
Mortgage agents help you get a mortgage from the lenders their brokerage has agreements with. They don’t have as many options as mortgage brokers.
Example: Sarah contacts a mortgage agent at a brokerage. The agent helps her find a mortgage, but the options are limited to the lenders the brokerage partners with.
Services
Mortgage agents usually handle simple, residential mortgages. They help you fill out forms, collect paperwork, and apply for a loan.
Example: John is buying his first home. He works with a mortgage agent who helps him apply for a mortgage. The process is smooth, and John gets a good deal.
Licensing
Mortgage agents are licensed but can only work for a mortgage brokerage. They can’t work independently like brokers.
Example: Emma wants a second home. She contacts a mortgage agent, but the agent can only show her options from the brokerage’s partners.
Mortgage Broker
A mortgage broker is an independent, licensed professional who works with many different lenders to find the best mortgage for you. They have more options than mortgage agents.
Role
Mortgage brokers can offer mortgages from a wide variety of lenders, including banks, credit unions, and private lenders. They have more flexibility to find the best deal for you.
Example: Mark works with a mortgage broker because he’s self-employed. The broker finds him a mortgage deal from a lender that works well with self-employed people.
Services
Mortgage brokers handle residential mortgages, commercial loans, and investment loans. They can help you if you have special needs, like bad credit or a unique property.
Example: Kate wants to buy an investment property. She works with a mortgage broker who helps her find the right lender for her situation.
Licensing
Mortgage brokers are fully licensed and often have more experience than agents. They can run their own business and offer more options.
Example: Tom needs a commercial loan for his business. He contacts a mortgage broker, who finds him a loan from a lender that specializes in business loans.
Mortgage Agent vs Mortgage Broker
Wondering if you should work with a mortgage agent or a mortgage broker? Discover the key differences and find out who can help you secure the best deal on your dream home!
Licensing Requirements: Who’s More Qualified?
Mortgage Agent
Mortgage agents must be licensed by the regulatory body in their province (e.g., Real Estate Council of Ontario – RECO in Ontario). To become an agent, they need to complete a licensing course and pass exams on mortgage law and ethical practices.
Example: Sarah becomes a mortgage agent after passing a licensing exam. She now works under a mortgage brokerage and helps clients find loans with a limited selection of lenders.
Mortgage Broker
Mortgage brokers hold a higher-level license, and in addition to completing the same courses as agents, they need more industry experience. Brokers often supervise agents and handle more complex deals.
Example: John becomes a mortgage broker after years of working as an agent. Now, he runs his own brokerage and supervises agents, providing more diverse loan options.
Pro Tip: If you’re looking for a professional with more experience and access to a wider range of lenders, a broker is your go-to option.
Compensation: Who Earns More?
Mortgage Agent
Mortgage agents are paid through commissions from lenders or brokers, typically a percentage of the loan. The commission can vary based on the loan size and agreement.
Example: Sarah helps a client secure a $300,000 mortgage. She earns a small commission from the lender based on the size of the loan.
Mortgage Broker
Brokers have more earning potential. They receive commissions from multiple lenders and can also charge fees for specialized services. Their earnings depend on the number of deals and their ability to negotiate better terms.
Example: John brokers a large commercial loan and earns commissions from multiple lenders, plus a service fee for managing the complex process.
Pro Tip: Mortgage brokers can help you get better rates and more favorable terms, meaning they could save you money in the long run, even with added fees.
Product Range: More Choices or Fewer Options?
Mortgage Agent
Mortgage agents typically have a limited product range. They can only offer mortgages from the lenders their brokerage works with.
Example: Sarah helps a client get a fixed-rate mortgage from one of the banks her brokerage partners with. The client has fewer options compared to what a broker could provide.
Mortgage Broker
Brokers have access to a wider range of mortgage products. They can offer conventional loans, government-backed loans (like FHA or CMHC), and specialized loans for self-employed or lower-credit borrowers.
Example: John, as a mortgage broker, helps a self-employed client find a loan with a bank that specializes in working with non-traditional earners.
Pro Tip: If you need more options or have specific needs, like bad credit or self-employment, a broker will likely be able to offer you better choices.
Service and Support: Which One Provides More Help?
Mortgage Agent
Mortgage agents typically focus on helping you secure a mortgage and don’t provide as much ongoing support or in-depth advice. Their role is more transactional.
Example: Sarah helps a client complete the paperwork for a mortgage application but doesn’t provide much follow-up support once the loan is secured.
Mortgage Broker
Brokers offer personalized service, guiding you through each step, from application to post-purchase advice. They often provide continued support, including refinancing help.
Example: John not only helps a client secure a loan but also checks in a year later to help them refinance for better rates.
Pro Tip: If you want more hands-on support and someone to guide you through the entire process, a broker is the better choice.
Best Use Cases: When to Choose an Agent vs. Broker
Mortgage Agent
Best for clients who want a straightforward mortgage from a specific lender. Great for first-time homebuyers or those with simple needs.
Example: Tom, a first-time buyer, wants to use a bank he trusts and is happy with a limited selection of mortgage options. A mortgage agent is perfect for him.
Mortgage Broker
Best for clients who want a variety of options and more personalized service. Ideal for those with complex financial situations or who want to shop around for the best rates.
Example: Kate, a self-employed entrepreneur, works with a mortgage broker to find the best deal for her unique financial situation.
Pro Tip: If your financial situation is more complicated or you want access to the best rates, a broker is a great choice.
Costs of Mortgage Agents vs Mortgage Brokers: How Much Will You Pay?
Mortgage Agent
Mortgage agents generally don’t charge clients directly, as they’re paid through commissions from lenders or brokers. However, some fees might apply depending on the agreement.
Example: Sarah doesn’t charge Tom directly for her services. She earns a commission from the lender once his loan is approved.
Mortgage Broker
Brokers may charge additional fees, especially for more complex loans. These fees are often worth it for the broader selection and personalized service.
Example: John charges a small fee for handling a complicated commercial loan, but the client is happy to pay because of the savings he gets through better terms.
Pro Tip: If you’re looking for a more tailored service and better loan options, it might be worth paying a broker’s fee.
Mortgage Agent vs Mortgage Broker Salary: Who Earns More?
Mortgage Agent
Mortgage agents earn commissions based on the loans they close, so their income can vary. It can range from $30,000 to $100,000 annually, depending on the volume of deals.
Example: Sarah closes five mortgages a month, earning commissions that total around $50,000 annually.
Mortgage Broker
Mortgage brokers typically earn more due to their responsibilities and commissions from multiple lenders. Their salary can range from $60,000 to $200,000, depending on experience and business volume.
Example: John earns over $150,000 annually as a broker, thanks to his experience and large volume of clients.
Pro Tip: If you’re looking for an experienced professional who can provide more options and earn better deals for you, a broker’s expertise may be worth the higher cost.
Clientele: Who Works With More Types of Clients?
Mortgage Agent
Mortgage agents usually work with clients seeking standard loans and have less involvement in specialized lending needs. They often assist first-time homebuyers or those with conventional financial backgrounds.
Example: Sarah helps a couple buy their first home with a simple fixed-rate mortgage.
Mortgage Broker
Brokers work with a wider range of clients, including those with complex financial situations, like self-employed individuals, those with bad credit, or those seeking specialized loans.
Example: John helps a self-employed freelancer secure a loan from a lender that specializes in non-traditional income verification.
Pro Tip: If you have a unique financial situation, a broker is more likely to find a solution tailored to your needs.
Workload: Who Handles More Responsibility?
Mortgage Agent
Mortgage agents focus on facilitating mortgage transactions and are usually responsible for client-facing tasks, like paperwork and initial loan applications. They don’t oversee the full process or handle major issues.
Example: Sarah handles the client’s initial inquiry, fills out the application, and sends it off to the lender.
Mortgage Broker
Brokers have a higher level of responsibility, managing complex transactions, multiple lenders, and often acting as the middle person between clients and various loan providers.
Example: John oversees the entire process, from application to final loan approval, and ensures that clients get the best deal possible.
Pro Tip: Brokers handle more complicated situations and provide a higher level of responsibility, making them ideal for clients with specific needs.
Long-Term Relationship: Who Stays in Touch After the Deal?
Mortgage Agent
Mortgage agents typically only stay involved until the mortgage is approved and finalized. They don’t often follow up afterward unless the client returns for another deal.
Example: Sarah completes the mortgage process but doesn’t reach out unless the client needs her services again.
Mortgage Broker
Brokers tend to develop long-term relationships with clients, offering ongoing advice, refinancing options, and support for future mortgage needs.
Example: John checks in with clients a year later, offering refinancing advice if better rates become available.
Pro Tip: If you’re looking for a mortgage professional who will continue to support you throughout your homeownership, a broker offers the best ongoing relationship.
Flexibility: Who Has More Independence?
Mortgage Agent
Mortgage agents work under the supervision of brokers and often have less freedom when it comes to selecting lenders or loan products. Their options are limited to what their brokerage offers.
Example: Sarah can only offer loans from lenders that her brokerage has partnered with, limiting her flexibility.
Mortgage Broker
Brokers are more independent and can work with multiple lenders, offering a broader selection of loan options and customized deals.
Example: John can offer various mortgage products from numerous lenders, allowing him to meet the specific needs of each client.
Pro Tip: If you’re looking for more options and greater flexibility, a broker has more freedom to find the best deals.
Time to Close: Who Gets the Job Done Faster?
Mortgage Agent
Mortgage agents tend to close deals more quickly due to their limited range of products and fewer negotiation steps. The process is often more streamlined.
Example: Sarah helps her client close the deal quickly because she’s working with a single, straightforward lender.
Mortgage Broker
Brokers may take longer due to their involvement with multiple lenders and more detailed negotiations, but they aim for better long-term outcomes.
Example: John’s process takes a little longer because he’s finding the best deal with several lenders, but the client ends up with a lower rate.
Pro Tip: If you need speed and simplicity, an agent may be quicker, but for the best long-term results, a broker is worth the extra time.
Risk Management: Who Helps Reduce Your Financial Risk?
Mortgage Agent
Mortgage agents typically work with standard products and offer fewer options to help mitigate financial risk, making them better for straightforward situations.
Example: Sarah helps a client get a stable fixed-rate mortgage with a low-risk profile.
Mortgage Broker
Brokers are experts in assessing clients’ financial risk and can help structure mortgages to minimize risk, offering more customized products.
Example: John assists a client in securing an adjustable-rate mortgage that matches their current financial situation while planning for potential rate changes.
Pro Tip: If you’re concerned about minimizing financial risk, a broker can offer more tailored solutions based on your individual needs.
Mortgage Agent vs Mortgage Broker Statistics
As the leader of residential mortgage Toronto, we have worked with mortgage brokers and agents. From our experiences, we have collected this data:
Mortgage Brokers
Handle about 30-40% of all mortgages in Canada.
Work with many different lenders, including banks, credit unions, and private lenders, giving you more options for finding the best mortgage deal.
Mortgage Agents
Typically manage a smaller portion of mortgages and usually work under a brokerage.
Offer mortgages from specific lenders tied to their brokerage.
Best for clients who need more straightforward, basic mortgage options.
Mortgage brokers are more commonly used because they offer a wider range of choices. However, mortgage agents can still be helpful for simpler needs.
How AJP Mortgage Can Help?
Not sure whether a mortgage agent or a broker is right for you? AJP Mortgage the best mortgage broker Ontario can help! Here’s how we make the process easier for you:
Personalized Advice
We’ll look at your financial situation and help you decide which professional is best for you.
Example: If you’re a first-time buyer, we’ll help you figure out if a mortgage agent is enough, or if you need a broker with more options.
Access to Multiple Lenders
We know the best agents and brokers and will match you with the right one.
Example: If you need a special loan, like one for self-employed people, we’ll connect you with a broker who can find the right lender.
Save Time and Effort
We’ll help you sort through all the options so you don’t have to.
Example: If you’re feeling overwhelmed by all the mortgage choices, we’ll simplify it for you and suggest the best options.
Support Throughout the Process
We’ll be with you every step of the way, from application to closing, to make sure everything goes smoothly.
Example: Once your mortgage is approved, we’ll still be here to help with any future questions, like refinancing.
Contact AJP Mortgage today and let us guide you to the best mortgage deal for your home!
Final Thoughts: Which One Is Right for You?
When choosing between a mortgage agent and a mortgage broker, think about what works best for you.
Mortgage Agent: If you want a simple process and prefer to work with one lender, an agent is a good choice. They are perfect for straightforward mortgages.
Mortgage Broker: If you need more options, better rates, or help with special situations, a broker is the way to go. They can offer more flexibility and guide you through complex needs.
Picking the right person will make the process easier and save you money. Take your time and think about what fits your needs best.
