How Much Is Your Bank Overcharging You?

Your bank gives you one rate. A mortgage broker shops 20+ lenders and finds the lowest rate you qualify for. Even a small difference adds up to thousands over your term — and tens of thousands over the life of your mortgage.

Updated July 2026

What This Calculator Shows You

Put in your mortgage amount, your amortization, the term you want, and the two rates you are comparing. The calculator does the rest:

• What each rate actually costs you. Not the monthly payment difference, which always looks small. The total difference over the full term, which does not.
• A year by year breakdown. Where your money goes, and how much of it is interest, under each option.
• The gap in plain dollars. A quarter point sounds like nothing. On a real mortgage over five years it usually is not nothing.

Now here is what it cannot tell you, and this is the part I want you to actually read.

Rate is not the whole deal. The penalty to get out. What you can prepay each year without a charge. Whether you can take the mortgage with you if you move. Whether you qualify at all. Those things routinely cost or save people more than the rate difference you are sitting here comparing. A cheap rate attached to a rigid contract is not a good mortgage.

Why the Rates Are Often Different

This is not a case of banks being villains. It is two different business models.

Your bank sells its own products. The person across the desk works for one lender. They have one set of guidelines, one product shelf, and one answer. If your file does not fit that shelf, the answer is no, and that is the end of the conversation. Nobody at that branch is going to send you down the street.

A broker is paid by the lender, not by you. On a typical residential deal, the lender pays my fee when the mortgage funds. That is why my service is free to you. It also means I am shopping a group of lenders against each other for the same file, and lenders that fund through brokers price sharply because that is how they win the business.

I have access to more than twenty lenders. Big banks, monoline lenders you have never heard of, credit unions, alternative lenders, and private lenders for the odd file. That is not a sales line, it is just arithmetic. One shelf versus twenty shelves.

When the Bank Is Actually the Better Choice

I am going to be honest with you, because you will find out eventually anyway and I would rather you hear it from me.

Sometimes the bank wins. If you have a long relationship, significant assets parked there, or you fit neatly into a package they are trying to keep, a bank can sharpen its pencil in a way that is hard to beat. Some credit unions do not deal through brokers at all, so if that is where you want to be, you go direct. And if your file is clean, simple, and you already have a strong offer in writing, sometimes the honest answer is take it.

Here is what I tell people. Bring me the bank offer. If I cannot beat it or improve the terms around it, I will tell you to sign it. I would rather be the guy you call in five years than the guy who talked you into something to make a sale.

What Most People Get Wrong

They sign the renewal letter. This is the big one, and it costs Canadians a fortune every year. Your lender mails you a renewal offer, it looks official, you sign it and send it back. That offer is very often not their best rate. It is the rate they hope you will accept. Shopping a renewal takes very little effort and it is the easiest money most people leave on the table.

They think using a broker costs them money. On standard residential deals the lender pays the broker. It does not come out of your pocket and it does not get added to your rate. If a deal ever does require a broker fee, which is rare and usually only on private lending, you find out before anything proceeds, in writing.

They compare a posted rate to a discounted rate. Not the same animal. Make sure both numbers you are putting in the calculator above are actual offers, not one real quote against a sticker price nobody pays.

They only ask about rate. Ask this instead: what is the penalty formula if I break early, how much can I prepay each year, and is it portable if I move. A lender that answers those clearly is worth more than a lender that is a tenth of a point cheaper.

A Real Scenario

Frequently Asked Questions

Q: Does a mortgage broker cost me anything?
On standard residential deals, no. The lender pays the broker when the mortgage funds. It is not added to your rate and it does not come out of your pocket. The exception is private lending, where a broker fee can apply, and in that case you are told the amount in writing before anything moves forward.

Q: Will applying with a broker hurt my credit more than going to a bank?
No. A broker pulls your credit once and can present that single application to multiple lenders. Shopping several banks yourself means several separate pulls. If anything, the broker route is easier on your credit, not harder.

Q: Can I just ask my bank to match a broker rate?
You can, and sometimes they will. Two things to watch. First, they often match the rate but not the terms, and the terms are where the penalty and prepayment rules live. Second, the match usually only appears once you have a real offer in hand, which tells you what the first number was. And third, would you like to deal with an honest broker who gave you the loweest rate (or best product) the first time rather than your bank who tried to pull one over you then offers the rate match? I think I know the answer to that question.

Q: Do brokers only work with lenders nobody has heard of?
No. Most brokers deal with major banks as well as monoline lenders, credit unions and alternative lenders. Monolines do only mortgages and do not have expense "store fronts", which is often exactly why their pricing is sharp. Your mortgage can be with a name you recognize or one you do not, and either way the contract is what matters.

Q: My bank already said no. Is that it?
Not usually. Every lender has its own guidelines on income, property type, credit and debt servicing. A decline generally means you did not fit that lender or have past derogatory credit, not that you are unfinanceable. Self employed income, acreages, manufactured homes and unusual income are the common ones, and they all have lenders who do them.

Q: Should I take the renewal offer my lender mailed me?
Not without comparing it. Renewal letters are frequently not the lender's best available rate. Comparing costs you nothing and takes very little time, and the difference over a five year term is often significant.

So What Do You Actually Do?

Run the two rates above and see the gap in real dollars. Then get an actual quote instead of a guess, because the number that matters is the one a lender will commit to on your file, with your income, your credit, and your property.

Look, if your bank offer is good, I will tell you it is good. That is the whole pitch.

Want to know if your offer is actually competitive?
Call or text 403-703-6847. To get you a straight answer fast, have these handy: your current mortgage statement or renewal letter, the rate and term you have been offered, and a rough idea of your income and how long you plan to stay in the home.

Shawn Selanders is a RECA-licensed mortgage broker with Mortgage Architects, serving High River, Okotoks, Calgary, Foothills County and Southern Alberta since 1999.