Curious about the difference between a mortgage agent vs. broker? Explore the tiered system, licensing process, and career progression in the mortgage industry
Working either as a mortgage agent or mortgage broker in Canada can be a rewarding career with good income and job stability. Both roles allow you to help people achieve their goal of buying a home by finding the right mortgage.
If you’re thinking about joining the mortgage industry, it’s important to understand the difference between a mortgage agent and a mortgage broker. While both professions are aimed at helping clients with mortgage financing, their responsibilities and licensing are not the same.
Not sure which path is right for you?
In this article, Canadian Mortgage Professional will provide a breakdown of the mortgage agent vs broker comparison. We will define both professions and discuss what each role involves. We will also provide answers to the following questions:
- What's the difference between a mortgage broker and an agent?
- What is a mortgage agent?
- Is it better to use a mortgage broker or not?
What's the difference between a mortgage broker and an agent?
Mortgage agents and mortgage brokers in Canada both help people find and secure mortgages, but there are key differences between them. Let’s explore both professions below:
What is a mortgage agent?
A mortgage agent in Canada helps people find the right mortgage for their home purchase. They work under a licensed mortgage broker, and their main job is to connect clients with mortgage lenders.
Offering a wide range of home loan options that suit their clients’ financial situation is in their line of expertise. They assist clients through the application process, explain mortgage terms, and help them understand the costs involved.
How to become a successful mortgage agent
If you see yourself in this career, becoming successful can be challenging. You must create long-lasting relationships with clients for repeat engagements and referral opportunities.
Hard work, persistence, and a genuine desire to help clients secure the best mortgage options will set you apart in this competitive industry. Here are three other keys to succeed as a mortgage agent:
Always be updated on the latest market trends and partner with reliable mortgage lenders. Take a peek at our special report on the best mortgage lenders in Canada.
What is a mortgage broker?
Mortgage brokers are licensed professionals who can help people find and secure a home loan to buy property—just like mortgage agents. They work with multiple mortgage providers such as banks, credit unions, and private lenders.
Their goal is to help borrowers choose a mortgage that fits their financial situation. They guide clients through the entire mortgage process, from application to approval, and explain the different loan options available.
Is it better to use a mortgage broker or not?
The answer depends on the client’s circumstances, goals, and financial situation. Eligible borrowers can save time and effort when they hire a mortgage broker.
They will greatly benefit from the expert advice when comparing interest rates and home loan offerings from multiple lending companies. Engaging a mortgage broker’s services will also help clients secure a better deal than going directly to a bank.
However, some people prefer dealing directly with their chosen mortgage lender, especially if they have an existing relationship and trust in said company. There are commercial banks that offer loyalty discounts or promotions that mortgage brokers can't access.
In the end, hiring a mortgage broker can be a smart choice if your prospects want more options and personalized guidance. But if they feel confident in navigating the mortgage process alone, they have the freedom to apply for a home loan by themselves.
Be transparent if they already have a prior connection with their selected lending company. Stay truthful to your clients by telling them that hiring you is not mandatory. Maintaining your integrity will increase your trustworthiness as a mortgage professional, especially in the long run.
Apply these tips if you’re an aspiring mortgage broker and you’ll establish your name in no time. Watch this video to learn more:
Want to know how to become a mortgage broker in Canada? Check out this guide.
Mortgage agents vs. brokers: Which role is right for you?
For those looking for flexibility and a straightforward path into the industry, becoming a mortgage agent is a great start. However, becoming a mortgage broker offers more growth opportunities if your primary objective is to:
- build a business
- lead your own team
- maximize your earning potential
Here's a comparative table highlighting both professions’ roles:
If you work as a mortgage agent, you must focus on helping clients through the mortgage process under the guidance of a mortgage broker. If you want to level up and become a mortgage broker, you will have the authority to build your own business and have supervisory responsibilities.
In the end, both roles can lead to a successful, long-term career in the mortgage industry. The best choice depends on your goals, skills, and desire for leadership and independence. Just be sure to continuously improve your strategies and go the extra mile.
And if you’re seeking role models in the country’s mortgage industry, look no further! Read our special report on the 75 best mortgage brokers in Canada.
Tiered licensing system for mortgage agents vs. brokers
To become a mortgage agent, you must complete the educational requirements and finish the licensing course. Then, you need to register with a mortgage brokerage in your province. There are two levels in terms of mortgage agent licences (level 1 and level 2).
You can only apply for a mortgage broker licence if you already have a mortgage agent level 2 licence. Once you have completed the licensing requirements, you can work as a mortgage broker.
Mortgage brokers take on additional responsibilities. As such, you are expected to have more experience and training. Complying with these qualifications will allow you to run your own mortgage brokerage and manage mortgage agents. You can also negotiate directly with mortgage lenders on behalf of your clients.
Mortgage agents work under mortgage brokers. This tiered system in Canada’s licensing for mortgage professionals is followed in major provinces like Ontario but might vary in some.
For instance, you need to become a mortgage associate in Saskatchewan before you can get a mortgage broker licence. Aspiring mortgage brokers in Québec can directly apply for a representative's certificate, instead of a licence, to start working.
Which offers better long-term growth: mortgage agent or broker?
Choosing between becoming a mortgage agent vs. a mortgage broker can be a tough decision for those entering the mortgage industry. So, which one provides better long-term growth? We will use three factors below to find out:
- responsibilities and focus
- career advancement opportunities
- income potential
Let's discuss them one by one:
1. Responsibilities and focus
Mortgage agents focus on helping their clients secure the most suitable mortgage offerings by connecting them with home loan providers. Their day-to-day tasks can involve:
- client calls and consultations
- doing the necessary paperwork
- cooperating with mortgage lenders to finalize deals
On the contrary, mortgage brokers take on a broader range of responsibilities. In addition to assisting eligible borrowers, they might be tasked to oversee a team of mortgage agents.
If you have your own brokerage firm, you need to handle its operational aspects and strategize for business growth. This leadership role offers greater autonomy and the potential to scale the business beyond personal transactions.
2. Career advancement opportunities
Mortgage agents often use their position as a stepping stone to become mortgage brokers. The licensing process for mortgage agents is simpler and quicker, allowing them to enter the industry faster.
However, brokers have more control over their careers, with opportunities to open their own brokerage, mentor agents, and expand their business.
3. Income potential
While both roles can offer competitive incomes, mortgage brokers generally have a higher earning potential. This is due to their ability to work independently and build a team of agents.
Mortgage brokers can earn not only from their own deals but also from the deals their mortgage agents close. This can make a scalable income stream. Creating their own business will also mean more opportunities for cash inflow.
Mortgage agent vs. broker: Upgrading your licence
Deciding whether to remain as a mortgage agent or level up as a mortgage broker depends on your goals and preferences.
Do you enjoy working with clients and just focusing on mortgage solutions? A career as a mortgage agent could be a great long-term fit. If you’re still testing the waters, working as a mortgage agent is also a smart choice.
But if you want more independence and higher income potential, upgrading your licence to become a mortgage broker could be the better path. Despite stricter licensing requirements, you can run your own business and have the chance to manage a team of mortgage agents.
Both roles offer great opportunities, so choose the one that best fits your goals and plans for the future. Either way, you will learn the basics and gain experience as your career progresses.
Remember, the path you choose should match your passion, strengths, and objectives. Make sure that it is connected to your vision for your career and personal life.
Did this comparison of mortgage agent vs. broker help you decide which profession suits you? We’d love to hear your thoughts. Share your comments below.
