Houski vs the banks

In this article we'll examine what the differences are between getting a mortgage from a bank, a mortgage broker, and Houski.

The differences between a mortgage from a bank vs a broker

The most significant differences between mortgage offerings between mortgage brokers and banks break down into two categories:
The mortgage's interest rate
The mortgage's features
Qualifying criteria
You can imagine any “mortgage product” (which is what we often call them in mortgage industry jargon) is just like a car. When you're buying a car, you have your choice of features.
Here are some examples of common mortgage product features:
Ability to pay off additional principal outside of your regular mortgage payments
Ability to double up your mortgage payment amount going forward
Ability to transfer the mortgage to a different property with the same interest rate and terms
To continue with our car analogy, the addition or removal of specific features raises and lowers the purchase price of the car. Mortgage products are very similar in that regard, except for a mortgage product, the price is raised and lowered by adjusting its interest rate. The higher the interest rate, the more you're paying the lender, and vice versa.
One difference that mortgage products have that cars do not is penalties. Not only do you lose features with lower rate mortgage products, you often gain harsher penalties. Penalties are incurred if you ever need to break your mortgage commitment. For Canadians, this happens on average every 3.5 years - so statistically if you take a low rate product with a bad penalty, you're very likely to lose money in the long run. Life happens, you get a promotion and you need to move, you have a baby and need a bigger place, etc. Think about it this way - lenders would not offer these extremely low rate products unless they were making money on them. No free lunch.
Can Houski get you the lowest available rate? Generally, yes. Would it be ethical for us to get you the lowest rate product without advising you of it's specific features (or lack of)? Absolutely not.
Another difference is qualifying criteria. Banks are notorious for handing out prequalifications/preapprovals and then having the mortgage fall through when they actually get around to looking at your documentation. These flimsy prequalifications have a high chance of resulting in cancelled purchase offers, which really sucks for everyone. Mortgage brokers are much more invested in making sure you can qualify for a mortgage up front, as they are not paid unless you actually get a mortgage.
So those are some general rules about the main differences between all mortgage products. Now we can drill down into the details of what the differences tend to be between bank and broker mortgages products.

Bank mortgage products

Tend to have higher interest rates (generally true but historically not always)
Tend to have more restrictive features
Tend to have worse breakage penalties
Often add a collateral charge to your mortgage, which is a generally annoying, dumb and terrible practice

Broker mortgage products

Tend to have lower interest rates
Tend to have more favourable features
Tend to have less severe breakage penalties

Other considerations

So from that comparison, you're probably thinking “it seems obvious that getting a mortgage from a broker is the better deal”, and you would be correct. The final nail in the coffin for choosing a broker over a bank is simply because brokers have access to bank mortgage products, and can often get you a lower rate than you would get by going directly to the bank anyway. Why? Because brokers have a lot more negotiating leverage than a person walking into a bank. We can send the deal somewhere else if they don't match our other lender's offers.

Should you use a bank or a broker?

You should use a mortgage broker.
Brokers have access to bank products, and can often place your mortgage at your bank (often at a significantly lower rate than you would get by going to your bank).
You will almost certainly get a lower rate.
You will almost certainly get a mortgage product with better features.
Brokers tend to be more flexibile on qualifying criteria than banks.
Brokers tend to advise more than banks (banks don't typically have much variation in their offering, but brokers have many options from various lenders).
Bank mortgage employees are typically sales people who are representing the bank's interests exclusively.
Brokers typically represent both your interests and mortgage lender's interests with the goal of reaching a fair deal for everyone.

Should you use a broker or Houski?

Houski operates as a mortgage brokerage, so all of the benefits of using a broker listed in this article also apply to Houski.
Houski is the easiest and fastest way to perform mortgage transactions in Canada.
Houski will instantly preapprove you accurately and without damaging your credit.
Houski will gather the majority of your required mortgage application documents automatically.
If you're a fan of technology and convinience, Houski is definitely for you.

Other stuff to be aware of

Banks often refer to their mortgage professionals as “advisors”, but the term advisers has a legal implication that means the person legally must represent your interests. Bank “advisors” are really just sales people who have no vested concern about your finanical welfare. We believe this exploitive practice should be illegal.
Banks calculate your mortgage breakage penalties based on your posted rate, not your actual rate (which they call “discounted”). This can cost you thousands of additional dollars if you ever need to break your mortgage - which the average Canadian does every three and a half years. We also believe this exploitive practice should be illegal.