Interesting. I had heard that brokers generally got a bonus for originating an insured deal. Must be a lender-by-lender basis. Are commissions from lenders fairly standard or is there a wide distribution? As I said and @skunkyjosh alluded to, transparency around broker commissions could be improved.valuemortgage wrote: ↑Sep 11th, 2017 5:35 pmNot necessarily. Lenders will save on the cost of funding those insured mortgages but that does not necessarily mean they will pay more. And even if the lender paid more for an insured deal, the insurer (CMHC/GE/CG) are not paying any commission to anyone. If anything, the client is the only one really benefiting from this, since he/she has already paid mortgage insurance and can keep that insurability and not have to cover the costs the lender would have to put into that rate.
Insured mortgage carries significantly less risk than an uninsured one, so that's why the lender offers a lower rate. That said, when you factor in the cost of the insurance premium (which the borrower pays), the effective rate is often worse for an insured deal than for an uninsured one. Could brokers be more transparent in terms of how they are compensated, sure, but I don't think you can generalize and say that brokers push clients to certain lenders or certain products because of commission structures.skunkyjosh wrote: ↑Sep 11th, 2017 4:57 pmWhy can you get better rates for insured mortgage vs down payments of 20%? then? Something to do with the conditions maybe? What are the conditions on insured mortgage that allows you to get your clients a better rate? They MUST take 30 years amortization? What is it? Tell us, it's your chance to be transparent.