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A bundled mortgage pairs a conventional first mortgage from a bank or B lender with a second mortgage from a separate lender — often a Mortgage Investment Corporation — funded together at closing to cover a shortfall the first lender's loan-to-value limit won't reach.
A bundled mortgage exists to close a financing gap: the client needs more borrowing power than a single A or B lender's maximum loan-to-value will allow, so a second lender funds an additional amount simultaneously, registered behind the first mortgage on title. It's a different structure from blend and extend, which combines old and new rates within a single lender's existing mortgage.
Because the second-position piece is usually unregulated private or MIC capital, a broker arranging a bundle has to watch the combined loan-to-value and combined monthly carrying cost carefully — not just the first mortgage's terms in isolation. Bundled structures are generally limited to conventional, uninsured deals, since default insurers do not permit simultaneous secondary financing behind an insured high-ratio mortgage.
Conventional deals only: bundling a first and second mortgage together is a conventional-financing technique; it is not available behind an insured high-ratio mortgage under CMHC, Sagen, or Canada Guaranty rules.
Second piece often unregulated: the second-position lender in a bundle is frequently a MIC or private lender, which is not subject to OSFI's Guideline B-20 the way the first lender may be.
Combined LTV and payments matter: brokers need to qualify and disclose the deal based on the combined loan-to-value and combined monthly cost of both mortgages, not just the first.
A workaround, not a workaround-free product: bundling has drawn regulatory attention when used to stretch beyond a lender's normal single-mortgage lending limits, so brokers should be transparent with clients about the total cost and risk of carrying two registered charges.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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