We are all familiar with the banks and local credit unions, but what are monoline lenders and why are they in the market?

Mono, meaning alone, single or one, these lenders simply provide a single yet refined service: to fulfill mortgage financing as requested. Banks and credit unions, on the other hand, offer an array of other products and services as well as mortgages.

The monoline lenders do not cross-sell you on chequing/savings account, RRSPs, RESPs, GICs or anything else. They don’t even have these products and services available.

Monolines are very reputable, and many have been around for decades. In fact, Canada’s second-largest mortgage lender through the broker channel is a monoline lender. Many of the monoline lenders source their funds from the big banks in Canada, as these banks are looking to diversify their portfolios and they ultimately seek to make money for their shareholders through alternative channels.

Monolines are sometimes referred to as security-backed investment lenders. All monolines secure their mortgages with back-end mortgage insurance provided by one of the three insurers in Canada.

Monoline lenders can only be accessed by mortgage brokers at the time of origination, refinance or renewal. Upon servicing the mortgage, you cannot by find them next to the gas station or at the local strip mall near your favorite coffee shop. Again, the mortgage can only be secured through a licensed mortgage broker, but once the loan completes you simply picking up your smartphone to call or send them an email with any servicing questions. There are no locations to walk into. This saves on overhead which in turn saves you money.

The major difference between a bank and monoline is the exit penalty structure for fixed mortgages. With a monoline lender the exit penalty is far lower. That is because the banks and monoline lenders calculate the Interest Rate Differential (IRD) penalty differently. The banks utilize a calculation called the posted-rate IRD and the monolines use an IRD calculation called unpublished rate.

In Canada, 60% (or 6 out of every 10) households break their existing 5-year fixed term at the 38 months. This leaves an average 22 months’ penalty against the outstanding balance. With the average mortgage in BC being $300,000, the penalty would amount to approximately $14,000 from a bank. The very same mortgage with a monoline lender would be $2,600. So, in this case the monoline exit penalty is $11,400 less.

Once clients hear about this difference, many are happy to get a mortgage from a company they have never heard of. But some clients want to stick with their existing bank or credit union to exercise their established relationship or to start fostering a new one. Some borrowers just elect to go with a different lender for diversification purposes. (This brings up a whole other topic of collateral charge mortgages, one that I will venture into with another blog post.)

There is a time and a place for banks, credit unions and monoline lenders. I am a prime example. I have recently switched from a large national monoline to a bank, simply for access to a different mortgage product for long-term planning purposes.

An independent mortgage broker can educate you about the many options offered by banks and credit unions vs monolines.


Bob Taylor
Mortgage & Business Leasing Specialist
705 479 5445



There is scientific evidence that not being able to perform a seemingly quick and simple task, such as drawing a clock, is linked to one’s ability to drive a car. Drawing a clock is actually considered to be a brain task that requires a higher level of brain function. The Clock-Drawing Test can indicate deficits related to your visual perception. As well, the Clock-Drawing Test can identify problems with short term memory and planning. There are a number of valid scoring methods for the Clock-Drawing Test that include the order, spacing and placement of the numbers and clock hands. The person being assessed is usually asked to draw a certain time on the clock, which is scored in terms of accuracy.

The Clock-Drawing Test was not developed for the specific purpose of evaluating driving in seniors. However, the research evidence evaluating the Clock-Drawing Test for assessing driving ability has been shown to be of moderate to strong quality. The research shows that the Clock-Drawing Test is a quick and easy way to identify drivers who may be experiencing cognitive changes . However, performance on the clock drawing test alone is not sufficient to revoke a person’s license. Researchers have suggested that this test, alongside other screening mechanisms, be used as part of a first step when assessing fitness to drive in older adults. In fact, the Ontario Ministry of Transportation has recently instituted a version of the Clock-Drawing Test as part of its Senior Driver Renewal Program that targets drivers aged 80 and older.

Concerns with public safety when it comes to screening older drivers must be balanced with costs to their mobility and health

Driving enables seniors to remain connected to their communities, maintain social ties, and access needed services, particularly in rural areas lacking public transit (2). Loss of licensure in older adulthood, whether voluntary or otherwise, has negative consequences, including depression, reduced out-of-home activity levels, social isolation, loneliness and a higher risk of placement in long term care . Any changes in licensing policies and procedures that affect older drivers (due to concerns with public safety) need to consider all the consequences. Taking away a senior’s license because of potential risk, must be balanced with potential negative consequences to the mobility and health of older adults.   Courtesy of CIEPC 0 Pulse Jan issue




February 14, 2017

DON’T BE SILENT ANOTHER FEDERAL GOVERNMENT TAX GRAB Recent media reports have suggested that the Government of Canada is considering a new federal tax on the employer paid portion of health and dental coverage in the upcoming budget just like the Ontario government did a few years ago. The cost for offering health and dental […]

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May 16, 2016

WHAT IS IT AND WHAT ARE YOUR OPTIONS? When you buy your first home you will probably hear a lot about mortgage insurance. The topic can be a little confusing. What is mortgage insurance, and do you need it if you already have life insurance? Should you purchase both, or just one? The concept of […]

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Do you want to be smarter about YOUR money?

February 5, 2014

Understanding money can be a challenge!  Not only are there often changes to the regulations in the financial industry, but you have changes in your life too. Perhaps you’ve just retired, or changed jobs.  Maybe you have recently graduated or started a family.  Or you could be looking to buy a house. Investor Education Fund […]

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Changing Carriers: Not always the best solution.

July 16, 2012

When you’re running a business, it is always important to maintain a focus on the bottom line. Decrease costs, increase profits. Many small to medium business owners focus on the opportunity to save costs by changing insurance carriers, but this isn’t always the best option. As with anything, cost savings can be outweighed by a loss in […]

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Coordination of Benefits

March 25, 2011

What is Coordination of Benefits? Coordination of benefits is a practice used to minimize the potential of fraudulent claims so that insurance claims are not paid multiple times when someone is insured under more than one insurance plan. When health care benefits are coordinated  the insured is fully covered, but not covered to excess. The […]

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Benefit plans valued more than ever

August 4, 2010

The perceived value of health benefit plans amongst employees has increased as a result of recent economic volatility and higher unemployment, according to the 2010 sanofi-aventis healthcare survey. The firm’s poll of 1,508 primary holders of group health benefit plans finds that 77% of respondents say the existing economic environment has increased the value they […]

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10 tips for better claims management

May 20, 2010

This article was found at Canadian Occupational Safety and can also be found by following this link. Employers — urged by the Workplace Safety and Insurance Board (WSIB) in Ontario —now have increased focus on claims management for work-related injuries, as well as early and safe return to work (ESRTW). This has resulted in health […]

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Walk A Mile In Her Shoes – Video

May 6, 2010

$800.00 Thanks to your generosity, that’s the amount I was able to raise for YWCA Programming. So thanks!  I couldn’t have done  it without you. We have uploaded a video to our YouTube Account so you can get a small glimpse of what a great event this was!  There are some great moments of humour, […]

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