Monoline Lender Definition: "Monoline lenders (aka non-deposit-taking lenders) are an important cog in the mortgage market. Their mortgage products and low pricing improve consumer choice and force our dominant banks to be more competitive." 

Being a part of VERICO One Link Mortgage I have access to over 50 different lenders which include banks, credit unions, monoline lenders, alternative lenders, and private lenders. As the largest mortgage brokerage in Manitoba along with being a part of our national network VERICO, I am able to offer the most competitive mortgage rates. The lowest rates we advertise are often offered by Monolines. Some reasons for that are the fact they strictly do residential mortgages and have low overhead costs.  So why do people ultimately choose a monoline? 

Frequently Asked Questions:

Q: Are there any risks to deal with a Monoline? 

A: No, there really aren’t any. Monolines are regulated by the federal government just like the major banks so they must follow similar lending guidelines and regulations. Fun fact, many Monolines receive their funding from major banks!

Q: What if a Monoline decided to leave the market place?

A: Another lender would take over their mortgages and the terms and conditions of their existing mortgage stays intact. A great example is a company I used to work for, FirstLine Mortgages, they decided to leave the marketplace and CIBC took over their book of business and services all of those mortgages.

Q: What are some other benefits to using a Monoline than just a low rate?

A: Well monolines typically have smaller penalties in the event you have to break your mortgage, pre-payment options that are typically better than the banks, monolines register a standard charge term on the title of your property which allows you to move to any lender once your term is up to take advantage of the best rates on the market. Banks and credit unions tend to register collateral charges which would make you incur legal fees to transfer your mortgage at the end of the term.

Here are some advantages of monoline lenders:

• They focus on one line of business: mortgages. This allows them to focus on providing the best possible mortgage products
• No bricks and mortar buildings, they are virtual banks essentially, making their overhead costs lower passing on savings to the consumers.
• The mortgage industry is heavily regulated by the government now more than ever, so whether you’re dealing with a major bank or monoline lender they are subject to satisfying the same guidelines for qualifying and approving customers.
• Mortgages are registered on title as a “standard charge” and not “collateral charge” which means you can transfer the mortgage to another lender at the end of the term without incurring legal fees (providing there isn’t a 2nd mortgage and/or secured line of credit on title)
• Rates are often lower than the major banks (no posted rates like the banks) which typically result in a lower penalty should the mortgage be discharged prior to the end of the term. Fun Fact; the average a Canadian is in their mortgage for is 3 years.
• Really good pre-payment options available
• They also offer online access to your mortgage as well as customer service departments to take on telephone inquiries. I always tell my clients to contact me for any mortgage questions and I will be able to help OR lead you in the right direction. Most of the time I can have a client consent form signed by the borrowers and deal with the lender on my clients behalf.

Some disadvantages people have expressed to me over the years would be that some people physically like to walk into their bank and speak to someone. My solution for that is my office is always open to my clients to speak about their mortgages and better yet I can be reached outside of regular bank hours. The other comments I have had are people like to have everything in one place which is completely understandable, however, if you can get a better rate and mortgage product elsewhere does it become as important if you're saving money? 

As a broker it is my job to make sure my clients pay the least amount of money over the term of their mortgage and for years after that. Every circumstance is different and I make sure I evaluate every clients needs and make recommendations of lenders based on their needs, most often it is a monoline lender. Fun Fact, I have my own mortgage with a monoline.

*Some monoline lenders I use; MCAP, RMG, First National, Merix, Lendwise, LifeCycle, CMLS, and Radius.

-Caily