# How Does Mortgage Insurance Affect My Choices?

> Mortgage insurance is a key player in the Canadian mortgage world, especially for those with down payments below 20%.

Category: Refinance
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/refinance/how-does-mortgage-insurance-affect-my-choices

## Answer
Mortgage insurance is a key player in the Canadian mortgage world, especially for those with down payments below 20%. It protects the lender if you can't make your payments. However, mortgage insurance doesn't replace the need for careful assessment of the borrower. Financial institutions (FRFIs) still need to do their homework on borrowers. Mortgage insurance is available from CMHC (Canada Mortgage and Housing Corporation) and private insurers. While it can help with homeownership, it's only one piece of the puzzle.

## Institutional highlights
- Mortgage insurance protects the lender, not you, if you can't make your payments.
- Lenders still have to check that you can afford your mortgage, even if you have mortgage insurance.
- Your lender can get mortgage insurance from CMHC or a private company.
- Lenders need to make sure the mortgage insurance company is financially stable.
- Your lender should regularly check the mortgage insurance policy throughout your mortgage term.

## Related guide
- https://ratellow.com/guides/heloc-vs-second-mortgage

## Sources
- LTV Ratio and Loan Type — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Mortgage insurance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#2.5.1
- 4.1.11 Exposures secured by residential real estate — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026