Monoline mortgage lenders in Canada
Monoline mortgage lenders are lenders that do one thing, mortgages. They have no branches, no chequing accounts and no credit cards, and they reach borrowers almost entirely through mortgage brokers. Because they are not trying to sell you anything else, their pricing on the mortgage itself is often sharp.
The monoline lenders listed here describe their own products and lending areas. For most borrowers the practical way to get a monoline mortgage is through a broker, who can compare several monolines against the banks on the same application.
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Are you a lender? List here freeWhat is a monoline lender?
A monoline funds mortgages from institutional money, largely through the securitisation programs that also serve the banks, and through sales of mortgages to investors, rather than from customer deposits. Its costs are mostly underwriting and servicing, and it wins business on price and terms because it has no other products to lean on.
Many monolines lend on prime, insured and insurable files, and some also have alternative lending arms. What they share is the channel: nearly all of their business arrives through brokers.
Monoline vs bank mortgage
The rate is often competitive, but the bigger difference is usually in the terms. The prepayment penalty on a fixed mortgage at many monolines is calculated in a way that tends to produce a smaller interest rate differential than the large banks’ method, which matters if there is any chance you will break the mortgage early.
The trade-offs are that there is no branch to visit, and a monoline cannot bundle a line of credit, chequing and investments the way a bank can. Some monolines also offer fewer product options, such as readvanceable lines, so check the features you actually need.
How monoline mortgage rates are set
A monoline’s rate follows its own cost of funding, which moves with the bond market and securitisation spreads rather than with a deposit base. That is why monoline pricing can move at a different moment from the banks’, and why the best rate on a given day is often from a lender the borrower has never heard of.
Rates are not published on this site. A broker quoting several monolines against the banks on the same date is the most reliable way to see where one sits.
Common questions
What is a monoline lender?
A lender that only offers mortgages. It has no branches or deposit accounts, funds its lending from institutional sources such as securitisation, and gets nearly all of its business through mortgage brokers.
Are monoline lenders safe?
Your mortgage is a contract registered against your property; its terms do not change if the lender is sold or its funding shifts. Many monolines are federally regulated and much of their lending is insured. Check a lender’s status with OSFI or the provincial regulator, listings here are self-reported.
Is a monoline better than a bank?
Often on rate and prepayment penalties, less so on convenience and bundled products. If there is any chance you will break a fixed mortgage early, the penalty calculation alone can make a monoline the better choice.
Can I get a monoline mortgage without a broker?
Rarely. Monoline lenders distribute almost entirely through mortgage brokers, and most do not take applications from the public.