# How does mortgage insurance affect bridge financing?

> Mortgage insurance, offered by CMHC and private providers, mitigates risk for lenders but *should not* replace sound underwriting practices.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-does-mortgage-insurance-affect-bridge-financing

## Answer
When applying, remember mortgage default insurance should not be a substitute for conducting adequate due diligence on the borrower, or for using other risk mitigants. It is important to understand the types of mortgage insurers:

| Insurer Type | Typical Coverage | Borrower Impact |
|---|---|---|
| CMHC | High-ratio mortgages | Required for low down payments |
| Private Insurers | Various levels | Impacts premiums and eligibility |

## Institutional highlights
- Mortgage insurance can help lower the risk for your lender when you're using bridge financing.
- Don't rely on mortgage insurance alone; make sure you understand the terms of your bridge loan.
- Your lender can get mortgage insurance from CMHC or a private company.
- Lenders look at how reliably the mortgage insurer pays out claims.
- Lenders check to make sure the mortgage insurer is financially stable.
- Lenders want to know where the mortgage insurer gets its money.

## Related guide
- https://ratellow.com/guides/bridge-financing-explained

## Sources
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0
- Footnotes — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/capital-adequacy-requirements-car-guideline-2026
- Page 3 — https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/new/cmhc-quick-reference.pdf#page=3