# How does mortgage insurance fit into the picture?

> Mortgage insurance acts as a risk mitigation tool, but it's *not* a substitute for robust underwriting.

Category: Strategy
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/strategy/how-does-mortgage-insurance-fit-into-the-picture

## Answer
Mortgage insurance acts as a risk mitigation tool, but it's *not* a substitute for robust underwriting. It safeguards the lender in case of default. It should augment, not replace, core underwriting principles. Think of it as an added layer of security, not the foundation itself.

## Institutional highlights
- Lenders often use mortgage insurance to protect themselves from risk.
- Your lender should carefully assess the mortgage insurance company they use.
- If your mortgage is insured, your lender must follow the insurer's rules for things like appraisals and paperwork.

## Related guide
- https://ratellow.com/guides/private-mortgage-exit-strategy

## 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
- OSFI exempts uninsured mortgage straight switches from the prescribed MQR and implements portfolio LTI limits — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/osfi-exempts-uninsured-mortgage-straight-switches-prescribed-mqr-implements-portfolio-lti-limits
- IV. Other guidance — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#4.0