Monoline Lender
A non-bank lender that specializes only in mortgages — broker-channel distribution, competitive rates, and typically better IRD penalty calculations than Big 5 banks.
A monoline lender is a non-bank financial institution that specializes in mortgages and typically only mortgages (no chequing accounts, credit cards, or broader banking). Monolines distribute exclusively through the mortgage broker channel and compete on rate and terms. Major Canadian monolines include MCAP, First National, RMG, Merix, Strive, and XMC. Monolines typically offer better IRD penalty math (IRD against your actual rate, not posted rate), fully portable and assumable mortgages, and more flexible prepayment privileges than Big 5 banks — at rates 10–30 basis points below Big 5 discounted rates.
Related Terms
A mortgage lender operating between traditional banks and private lenders — offering slightly relaxed underwriting and slightly higher rates than banks.
A licensed professional who shops multiple lenders on your behalf — typically compensated by the lender, not the borrower.
The larger of two penalty calculations applied when breaking a fixed-rate mortgage early at the Big 5 banks — often the difference between your posted rate and the lender's current posted rate.