If it's true that commission mortgage lenders charge more, then it should also be true that salaried mortgage lenders have lower interest rates. Simple logic says that the amount saved, which would have been paid to the mortgage lender as a commission, should be given to the borrower. 

In order to test this assumption, we surveyed the rates offered by a selection of both salaried and commission based mortgage lenders. According to our survey, the difference in mortgage rates was at most, about 1/4 of a percent, with commission mortgage lenders often having the lower rate. While our survey does not claim the final word, it appears that banks are not giving away the store.

It turns out that most lenders use the same mortgage investment companies as their source of funds. Wholesale loan prices tend to be consistent among lenders, other than a potential volume discount. Some mortgage lenders in effect also compete with themselves by having both a retail division, and a wholesale division that gives brokers the ability to sell the same mortgage programs. 

Free market competition can also prevent zealous overpricing of mortgages. Regardless of how they are paid, if a lender cannot offer competitive interest rates to borrowers, they won't be able to sustain their business. As long as borrowers continue to compare rates and loan fees, mortgage lenders need to abide by market pricing, and also try to provide more efficient customer service.