Alberta Real Estate Licensing Exam Practice · Question
David, a mortgage broker in Calgary, is advising a client on mortgage options. His client has a loan-to-value ratio of 90% and is seeking a 25-year amortization. Which federal entity provides the mandatory mortgage loan insurance for this type of mortgage?
For high-ratio mortgages, where the loan-to-value ratio exceeds 80%, mortgage loan insurance is mandatory and is typically provided by the Canada Mortgage and H
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Question: David, a mortgage broker in Calgary, is advising a client on mortgage options. His client has a loan-to-value ratio of 90% and is seeking a 25-year amortization. Which federal entity provides the mandatory mortgage loan insurance for this type of mortgage?
Answer options:
- Office of the Superintendent of Financial Institutions (OSFI) ✅ Canada Mortgage and Housing Corporation (CMHC)
- Bank of Canada (BoC)
- Financial Consumer Agency of Canada (FCAC)
Correct answer: Canada Mortgage and Housing Corporation (CMHC)
Explanation: For high-ratio mortgages, where the loan-to-value ratio exceeds 80%, mortgage loan insurance is mandatory and is typically provided by the Canada Mortgage and Housing Corporation (CMHC), or other approved insurers like Sagen or Canada Guaranty.
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