Finder's fees, volume bonuses, renewal compensation and who actually writes the cheque. A plain-English guide to mortgage broker commission in Canada, and what it means for running a book.
In most Canadian residential deals the borrower pays the broker nothing. The lender pays a finder's fee on funding, and that fee is the core of how mortgage brokers get paid. Understanding the structure matters for borrowers weighing advice, and for brokerages trying to forecast revenue across a book.
Who pays the mortgage broker commission
For a standard prime residential mortgage, the lender compensates the brokerage once the loan funds. The brokerage then splits that with the agent according to their agreement. Borrower-paid fees appear mainly in private, alternative or heavily bruised-credit lending, where the lender pays little or nothing and the fee must be disclosed to the borrower in writing before commitment.
What the average mortgage broker commission looks like
- Finder's fee: commonly around 0.5% to 1.1% of the mortgage amount, paid on funding
- Term length matters: five-year terms typically pay materially more than one- or two-year terms
- Volume bonus: additional basis points tied to annual funded volume and efficiency ratios with a given lender
- Renewal or trailer compensation: offered by some lenders instead of, or alongside, a full upfront fee
- Agent split: the brokerage retains a share, so the agent's take is a percentage of the finder's fee
So on a $500,000 mortgage at a 0.85% finder's fee, the brokerage receives roughly $4,250 on funding, before the agent split. That is the number behind questions like how much commission does a mortgage broker make — it is one payment per funded deal, not a salary.
Trailer fees and renewal compensation
A handful of Canadian lenders pay ongoing trailer compensation, typically a small annual percentage of the outstanding balance, in exchange for a reduced upfront fee. Others pay a renewal fee when the borrower re-signs through the same broker. Either way, the economics reward brokers who keep contact with clients after funding rather than treating a closed deal as finished.
"Upfront-heavy compensation makes new deals feel urgent. Renewal and trailer compensation make the existing book valuable. Most brokerages are structured for the first and under-invested in the second."
Clawbacks
If a mortgage is discharged early — typically within the first 12 months, sometimes longer — the lender can reclaim all or part of the finder's fee. Clawback terms vary by lender and are set out in the broker agreement, not the borrower's mortgage. Early payout, a quick refinance elsewhere or a property sale can all trigger one.
Frequently asked questions
- Who pays mortgage broker commission? In most prime residential deals, the lender does, on funding.
- How much is mortgage broker commission? Commonly 0.5%–1.1% of the mortgage amount, varying by lender and term.
- Do borrowers ever pay a fee? Yes — mainly in private and alternative lending, and it must be disclosed in advance.
- Does the broker get paid again at renewal? Only where the lender offers renewal or trailer compensation.
- Is commission the same across lenders? No. Rates, volume bonuses and clawback windows differ, which is why disclosure rules exist.
What this means for running a brokerage
Compensation that is concentrated at funding, plus clawback exposure in the first year, plus renewal value that only materialises if the client comes back, adds up to one conclusion: the settled book is the asset. Knowing which clients are approaching renewal, sitting above current market pricing, or still inside a clawback window is the difference between a predictable year and a purely transactional one. That monitoring is what Kayotte is built to do alongside your existing systems.
Compensation structures vary by lender and province. Confirm current terms with your lender agreements and provincial regulator before relying on any figure here.