I think the word of the year in broker channel for 2024 was “Parity.”
I heard it almost monthly: on lender calls, in Facebook forums, on lender panels, at dinners with execs, in team meetings. I myself grilled two bank reps on stage about it at our team’s fall summit in September.
The broker channel begged for parity from our bank lenders for a year.
par·i·ty1
noun
1. The state or condition of being equal, especially regarding status or pay.
I think that many brokers have forgotten that parity actually means parity.
TD bank released its Real Time Pricing calculator at the end of March to a mixed bag of reviews. I found it quite shocking to see the negative reviews when they spent much of the last year and tens of thousands of dollars making a monstrous fundamental change to the way they do business—adapting processes and internal workflow, which is no small feat at a major bank—all to give us exactly what we want. To show us that they are listening and that they are committed to doing business in the broker channel.
Why upfront rate transparency is a game-changer
This change is a huge win for us on nearly every level. Agents now know exactly what rate they can offer based on the file size, term, property use and product type—unlike the old system, which required submitting a file, sending a Regional Sales Manager (RSM) request, waiting a few days, and then pulling the file if we couldn’t beat the competitor’s rate.
I often heard from agents who never submitted to TD because they didn’t know they could send an RSM request and get lower pricing so they simply went by the rate sheet all the time. Imagine the clients who were lost simply because the agent didn’t know they could request a lower rate or they didn’t watch the bond market and time the request on the right day, which could have resulted in a lower rate than a few days prior.
The new process means we don’t need to bog down the underwriters with deals and rate changes and updated commitment processing when rates are approved, or with files that are in the queue that will inevitably not fund if the rate approval doesn’t come back low enough. This should help improve both our turnaround times and funding ratios—not to mention free up our RSM inboxes from rate requests, giving them more time to focus on the work they were hired to do.
So where are the negative reviews, you ask? It all comes down to compensation.
And I hate to say, we don’t get to ask for parity and then be upset when they actually give us parity.
Yes, if you want to achieve the same rock-bottom rate as the branch, you will be taking a hit in commission and paid similarly to a branch Mobile Mortgage Specialist (MMS), who is also taking a hit on their commission to offer that rate.
The real costs behind supporting the broker channel
I’ve heard a few comments lately suggesting that broker-channel mortgages should be cheaper for banks to fund since they’re not covering benefits or vacation pay for brokers—and that, as a result, brokers should be paid more. That’s simply not true.
Branch employee costs are spread across all channels of the bank’s business model (deposits, investments, daily banking, etc.)—whereas the broker channel is dedicated solely to mortgage acquisition. The bank is also contributing hundreds of thousands a year in sponsorship funds into the broker channel that they don’t need to do in-house.
Sponsorship and advertising dollars go toward every conference, every brokerage Christmas party and team training event, networking events, awards galas—even dinners, hockey games, and that giant annual party put on by Mortgage Professionals Canada each year. Add in the travel and accommodation costs to fly staff across the country, plus the cost of hiring an entire team to support the broker channel.
And that’s not even getting into the costs of outsourcing underwriting or integrating with third-party platforms like Velocity, Finmo and Expert vs. the in-house system the branch uses. Plus, I’m certain there are many more hidden costs that I’m missing.
One broker might believe they cost less to the bank than a branch employee without seeing the bigger picture of costs associated with obtaining that business.
To build on that comparison, brokers have the ability to incorporate—which means that even with the same compensation, we still have an advantage. It’s one of the reasons bankers continue to leave their roles each year to make the jump into brokering.
Options are still our edge
The other main draw? Options.
Brokers still have the benefit of options. We can find products that suit our clients in more ways than simply rate. A branch MMS has limited tools in their toolkit—rate, cashback, credit card points.
A broker has a much bigger toolkit. Numerous lenders, multiple cash-back offers, a huge variety of products and terms lengths, underwriting policies, alternative and private lending. We forget that one lender’s static payment variable may suit one client and not be ideal for the next. That the rental worksheet at one lender may qualify clients for hundreds of thousands less than another lender, and that rate might not be the key factor when faced with a higher approval amount.
The buydown calculator won’t reduce average commissions from other lenders—we already have this flexibility elsewhere. Just last night, a monoline lender let us buy down our entire base commission to match a major bank’s offer. This would result in volume bonus and efficiency bonus as the only compensation totalling 20 bps.
Brokers have been buying down rates with monoline lenders forever, so why the sudden panic when a bank offers it as well? Many lenders offer rate specials with lower compensation—calling something a “special” and paying us less is still a buydown. At the end of the day, the choice is yours.
The sky is not falling on the broker channel.
You won’t be able to match every offer—and yes, there will still be those files where the branch pulls a rabbit out of a hat.
It may feel harder right now, but this isn’t new. Heightened stress just makes it feel that way. Clients are coming to us carrying anxiety, and we’re the wall they throw it all against on a daily basis. We’re the gatekeepers to the money, the interest rate, the monthly payment—things that can change their quality of life, improve their financial picture, even help mend relationships that are strained over money.
We absorb all of that stress every day and then dump on things that really aren’t the problem—just to release the pressure before heading home to tuck in the kids and do it all again tomorrow. Displacement is the act of redirecting negative emotions from their true source to a less threatening target to cause temporary relief for pent-up emotions.
And sure, a major change to a familiar process may feel like a good place to displace some stress. But the reality is, what TD has offered us is another tool—one that can actually help us compete and mitigate stress before it grows.
Opinion pieces and the views expressed within are those of respective contributors and do not represent the views of the publisher and its affiliates.
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broker channel commission guest column jill moellering mortgage pricing opinion td td bank
Last modified: April 21, 2025
