An integrated optical isolator is a crucial part of photonic integrated circuits (PICs). Existing optical isolators, predominantly based on the silicon-on-insulator (SOI) platform, face challenges in integrating with active devices. We propose a broadband, compact TM mode Mach–Zehnder optical isolator based on InP-on-insulator platforms. We designed two distinct magneto-optical waveguide structures, employing different methods for bonding Ce:YIG and InP, namely O2 plasma surface activation direct wafer bonding and DVS-benzocyclobutene (BCB) adhesive bonding. Detailed calculations and optimizations were conducted to enhance their non-reciprocal phase shift (NRPS). At a wavelength of 1550 nm, the direct-bonded waveguide structure achieved a 30 dB bandwidth of 72 nm with a length difference of 0.256 µm. The effects of waveguide arm length, fabrication accuracy, and dimensional errors on the device performance are discussed. Additionally, manufacturing tolerances for three types of lithographic processes were calculated, serving as references for practical manufacturing purposes.