Don’t shun the small lender

Matt Chan • August 7, 2012

The Globe and Mail recently published a very good article on why you should be open to using a small lender.

Whether you are a first time home buyer or refinancing your home, there are many factors to choose from when deciding on which lender to go with.  Although there are many good reasons to go with a large major lender (i.e. one of the major banks or a major credit union), there are also many reasons why you should consider a smaller lender.

Small lenders may offer better pricing that could mean savings for you over the term of the mortgage.  Also, small lenders may also offer better pricing when your mortgage is up for renewal.  In general, even if the initial rates are the same, each lender (large or small) will have their own set of rules including: prepayment privileges, portability, prepayment penalties and payment increases.

Sometimes the biggest reason to use a small lender is their ability to underwrite your mortgage differently.  Some larger banks and credit unions may be fairly strict with certain rules about underwriting.  They have standard guidelines that are very set with little flexibility for exceptions.  A common reason for this is because a lot of the big decisions are made in another city (i.e. Toronto) and are not comfortable or familiar with the local Vancouver market.

Although most lenders have general guidelines, some smaller lenders are more open to seeing an application on a ‘make sense’ basis.  They have the ability to be a bit more open minded and flexible to make an exception on an application that may either not get approved by a big bank or get approved with a higher rate.  These scenarios are common when someone buys a more unique home in the Vancouver area or may not be able to have traditional proof of income (i.e. self employed/business for self buyers).

The article addresses a lot of good points on why you should not fear a small lender.  If a small lender exits the market, they are usually bought out and the terms of the mortgage would generally be assumed by the new purchasing lender.

In the end, choose a lender that offers you a product that make sense for you.

CONTACT

Share

RECENT POSTS

Bank of Canada Raises Rate to 2.5% — October 28, 2026

By Matthew Chan • October 28, 2026
On October 28, 2026, the Bank of Canada raised its key interest rate by 0.25%, bringing it to 2.5%. If you have a mortgage, are shopping for a home, or have a renewal coming up, this decision matters. Here is a plain-language look at what changed, why it happened, and what it could mean for you.

How to Qualify for a Mortgage After Bankruptcy in Canada

By Matthew Chan • October 21, 2026
Financial setbacks happen. Bankruptcies and consumer proposals are more common than most people realize—and they don’t define your future. Going through one doesn’t mean homeownership is off the table forever. It simply means lenders want to see that you’ve taken control, learned from the past, and built a stronger financial foundation moving forward. What lenders look at after a bankruptcy or consumer proposal How long it’s been since your discharge Your discharge date matters. For lenders, this is your reset point. There’s no law that says you must wait a specific amount of time before applying for a mortgage, but the longer your track record after discharge, the stronger your application becomes. What matters most is how responsibly you’ve managed your finances since then. Your credit rebuild Re-establishing credit is critical. After discharge, most people start with a secured credit card and use it consistently and responsibly. To be considered fully re-established, lenders typically want to see: Two active trade lines At least two years of clean payment history Credit limits of around $2,500 on each No late or missed payments Your down payment or equity The more money you can put down—or the more equity you have when refinancing—the lower the risk for the lender. A stronger down payment often opens the door to better terms and more lender options. Your debt service ratios Lenders will also look closely at how much of your income goes toward housing and other debts. The stronger your income relative to your monthly obligations, the easier it is to qualify. Conventional vs. insured mortgage options To access the most competitive mortgage products, lenders typically want to see: At least two years plus one day since discharge Fully re-established credit Minimum down payment requirements met Mortgage insurance in place if your down payment is under 20% (through CMHC, Sagen, or Canada Guaranty) Total debt obligations generally not exceeding 44% of your gross income Alternative lending options Not every situation fits neatly into a bank’s box—and that’s where alternative lending can help. Independent mortgage professionals work with both traditional and alternative lenders, including those who specialize in complex financial situations. These lenders look at the full picture: equity, income stability, and your plan moving forward. While rates and terms may not be as competitive as prime lending, alternative financing can be an effective short-term solution—especially if you need a mortgage before your credit is fully rebuilt. Let’s talk about your next step Whether you’re planning ahead for the best possible mortgage—or need a solution sooner rather than later—there are options available. If you’d like help mapping out a clear path forward, reach out anytime. I’d be happy to review your situation and help you build a plan that gets you back into homeownership with confidence.

What Older Canadians Should Know About Mortgage Financing

By Matthew Chan • October 14, 2026
Retirement doesn’t always mean a mortgage-free life anymore. And that’s okay. Between higher home prices, rising living costs, and longer life expectancy, many Canadians are choosing to retire with a mortgage or refinance later in life to create more flexibility. The goal isn’t perfection. It’s having options that actually support the life you want to live. If you’re thinking about how a mortgage fits into your retirement years, you’re not alone—and you’re not out of options. Why work with an independent mortgage professional? Because retirement financing is not one-size-fits-all. Unlike a single bank, an independent mortgage professional can look across multiple lenders and solutions to find what truly fits your income, equity, and long-term plans—not just what one institution offers. Mortgage options available in retirement Traditional Mortgage Solutions Many retirees still qualify for standard mortgages. Pension income, investment income, and other retirement sources can often be used to support an application. If you have good equity and solid credit, this is often the lowest-cost option. Reverse Mortgages For homeowners 55+, a reverse mortgage can unlock tax-free equity from your home with no monthly payments required. There’s no income verification or medical questions, making it a helpful option for those who want to improve cash flow while staying in their home. Home Equity Line of Credit (HELOC) A HELOC allows you to access your home equity as needed and only pay interest on what you use. Many retirees appreciate the flexibility and like consolidating income and expenses in one place. Private Financing Sometimes life throws a curveball. If timing, income, or credit create challenges, private financing can act as a short-term bridge. It’s not usually the first choice, but it can provide solutions when traditional lenders can’t. If you’re approaching retirement—or already there—and wondering how your mortgage fits into the picture, let’s talk. A clear plan can make retirement feel a lot more secure and a lot less stressful.