Guide
On most residential mortgages in British Columbia, the lender pays the broker, and the borrower pays nothing out of pocket. There are some defined cases where a fee applies, and they're always disclosed in writing before you commit. This page explains the whole thing in plain language.
By Kyle Scott, Licensed Mortgage Broker · BCFSA #504479 · Last updated April 24, 2026
Landmark Mortgages is based in Victoria and works with homebuyers and homeowners across British Columbia. The information here applies to BC mortgages.
The lender, on most files. Here's how that works mechanically: when your mortgage funds at closing, the lender pays the brokerage a finder's fee out of its own pocket. The fee is part of the lender's cost of doing business and is the same whether you reach the lender through a broker or through a branch.
Brokers don't lend money themselves. We connect borrowers to lenders, which include banks, credit unions, monoline lenders, and private institutions.
Short answer: no. Even when a borrower fee applies (private and MIC deals, some specialized files), it is charged only on closing of the loan. If the deal does not close, you do not owe a fee.
This is true at Landmark Mortgages and is a regulatory expectation under BCFSA. If a BC broker is asking you to pay anything before your mortgage funds, get that in writing and read it carefully.
What if my deal doesn't close, do I still owe a fee?
No. Fees are earned on funding, not on application or signing. If your file does not close, for any reason, you do not pay us a fee.
Two answers, depending on the file type.
On standard prime (“A”) residential mortgages: zero to the borrower. The lender pays the broker a finder's fee, calculated as a percentage of the mortgage amount and typically in the range of 0.5% to 2% in Canada, varying by lender, term, and product. You pay nothing additional.
On private and alternative (MIC) mortgages, and some specialized files: a borrower-paid fee may apply, typically in the same 0.5% to 2% range of the mortgage amount. The fee is disclosed in writing in advance and earned only on closing.
What commission rates do mortgage brokers earn?
This is the same question from the broker's side. On prime files in BC, lender finder's fees generally fall in the 0.5% to 2% range of the mortgage amount, depending on the lender, term length, and product type. Private and MIC compensation varies more widely and is often borrower-paid rather than lender-paid.
Are mortgage broker fees negotiable?
Lender-paid commissions on prime mortgages aren't negotiable by the borrower; they're set on each lender's published wholesale rate sheet. Borrower-paid fees on private and MIC deals are sometimes negotiable, depending on the file complexity and the lender involved.
Are mortgage broker fees tax-deductible?
General rule: borrower-paid mortgage broker fees may be deductible if the mortgage is on an income-producing property (a rental, a commercial property, or a business loan), and generally not deductible on a principal residence. Tax treatment is fact-specific. Confirm with your accountant before claiming anything; this is general information, not tax advice.
How and when are broker fees actually paid?
When a borrower-paid fee applies, it is deducted from the mortgage advance at closing by your lawyer or notary. You don't write a separate cheque, and you don't pay anything before your mortgage funds.
There are real situations where a lender does not pay a finder's fee, or pays one that doesn't reflect the work involved. In those cases, a fee may be charged to the borrower. The most common scenarios are:
Private lenders and mortgage investment corporations (MICs) generally do not pay broker commissions, or pay only a small amount. These lenders are typically used for short-term needs, equity takeouts, credit rebuilds, unique properties, or bridging situations where institutional financing is not available. A borrower-paid broker fee on this kind of file is normal and is disclosed up front.
Self-employed clients with complicated income structures, new-to-Canada files, files with significant credit repair, foreclosure-redemption financing, or specialized commercial scenarios can require substantially more underwriting and lender negotiation than a standard prime file. Where the lender's compensation does not cover that work, a borrower fee may apply.
On certain refinance and equity-takeout structures, the lender's compensation does not match the work or risk involved, and a borrower fee may be required to make the deal viable.
A common point of confusion: if I go to a bank directly, am I avoiding a broker fee? In almost every case, no. Broker compensation is paid by the lender and is already built into the lender's pricing, whether you reach that lender through a broker or walk into a branch. The lender pays its sales channel either way; the only difference is who that sales channel is.
In other words, going through a broker doesn't add a cost to your mortgage that going to a bank avoids. The bank's mobile mortgage specialists and branch staff are also paid (often on commission). The structure is the same; the labels are different.
Mortgage broker vs. bank for first-time homebuyers
First-time buyers benefit from the broker channel for a few reasons that aren't about cost:
You don't need to choose between a broker and a credit union. Brokers in BC access most major credit unions (Coast Capital, First West, Community Savings, and others) through wholesale channels. There's no broker fee to access a credit union through this path; credit union compensation works the same way as bank compensation.
To bring it back to specifics:
If you'd like a straight answer about what your file would look like, including what (if anything) it would cost you, the easiest way is to get in touch. No obligation, no pressure.
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