According to a 2011 report by the Canada Housing and Mortgage Corporation (CMHC), only 48 per cent of first-time homebuyers choose to use a mortgage broker. As the first purchase of a home can be daunting, inexperience often leads people to seek a mortgage where they are comfortable – their local bank. But there are other reasons why people donot use a mortgage broker. These reasons, however, are actually misconceptions.

Many people fear that getting a mortgage from another lender will demonstrate disloyalty to their bank. First-time homebuyers often mention perceived rewards for their loyalty (for example: lower rates on other accounts and credit cards) as a key reason why they stay with their bank and don’t use a mortgage broker. Interestingly, the Bank of Canada reveals that the opposite is true. Established customers usually pay more fees and interest than new ones.

Those who donot use a mortgage broker also believe that brokers push five-year fixed rates. This misconception is because many brokers publish ads declaring low five-year fixed rates. Brokers do this because the five-year fixed rates are the most popular option for Canadians. However, any mortgage broker will tell you that they actually sell more variable-rate mortgages. They will also tell you that the best rate for a homebuyer is one that suits their needs, not the one that they have advertised.

Banks also get a lot of business based purely on their reputation. Many first-time homebuyers feel comfortable with a bank because of its standing. What is interesting is that the mortgage specialists that represent the banks earn about the same amount of commission as the brokers. Most brokers and mortgage specialists will tell you that reputation should be based on individual performance rather than the company that they represent. There are shady deals and people in both arenas just as there are stellar, professional mortgage brokers and bankers.

Finally, for those who do understand the power of shopping for a mortgage rate, they often feel equipped to do it themselves. However, a mortgage broker will tell you that they have access to rates that are not posted online and networks of lenders that the public cannot access.

For all the misconceptions, using a mortgage broker is still the best route for finding a mortgage. Whether you are a first-time homebuyer or seasoned in real estate purchases, a mortgage broker is most likely to find you the best option for your situation.