What is monoline mortgage lender?

Monoline mortgage lenders in Canada are specialized financial institutions that focus solely on providing mortgage loans. Unlike traditional banks, monoline lenders do not offer other banking services such as savings accounts or credit cards. Their sole purpose is to originate and underwrite mortgage loans.

Monoline lenders operate under a different business model compared to traditional banks. They rely on mortgage brokers to connect them with borrowers rather than having their own branch network. Mortgage brokers act as intermediaries between borrowers and lenders, helping borrowers find the most suitable mortgage product and guiding them through the application process. Monoline lenders often offer competitive interest rates and terms, as they have lower overhead costs compared to traditional banks. They may specialize in specific types of mortgages, such as high-ratio mortgages (where the down payment is less than 20% of the property's value) or self-employed mortgages (for individuals who have non-traditional income documentation).

Some well-known monoline lenders in Canada include First National, Merix, MCAP, and RMG. These lenders work with mortgage brokers across the country to provide a range of mortgage options to borrowers. It's important to note that while monoline lenders may not have physical branches, they are subject to the same regulations and oversight as traditional banks. Borrowers can have confidence in their reliability and adherence to industry standards.