Priya, a first-time homebuyer in Montreal, is approved for a collateral charge mortgage. Her mortgage agent provides her with a disclosure statement as required by law. What is the main purpose of this Cost of Credit Disclosure statement?

Question: Priya, a first-time homebuyer in Montreal, is approved for a collateral charge mortgage. Her mortgage agent provides her with a disclosure statement as required by law. What is the main purpose of this Cost of Credit Disclosure statement?

Answer options:

• To guarantee the mortgage interest rate will not change over the term. ✅ To provide Priya with all material information about the cost of borrowing, allowing her to compare products.
• To inform Priya about the lender's internal lending policies and risk assessment criteria.
• To outline the process for taking out a second mortgage on her property in the future.

Correct answer: To provide Priya with all material information about the cost of borrowing, allowing her to compare products.

Explanation: The Cost of Credit Disclosure statement, mandated by provincial consumer protection legislation, ensures that borrowers receive clear and comprehensive information regarding all charges and costs associated with their mortgage.