Mortgage Agent Licensing Practice Exam · Question
A mortgage agent is explaining the B-20 Stress Test to a client seeking an uninsured mortgage. The current 5-year fixed contract rate is 4.79%. What is the rate the client will be qualified at, and why?
Under OSFI Guideline B-20, the qualifying rate for uninsured mortgages is the greater of the contract rate plus 2% (4.79% + 2% = 6.79%) or 5.25%. Since 6.79% is
Start free practice for Mortgage Agent Licensing Practice Exam
307 questions · no signup required · 40 free questions per day
Question: A mortgage agent is explaining the B-20 Stress Test to a client seeking an uninsured mortgage. The current 5-year fixed contract rate is 4.79%. What is the rate the client will be qualified at, and why?
Answer options:
- 4.79%, as it is the actual contract rate.
- 5.25%, because it is the minimum floor rate set by OSFI Guideline B-20. ✅ 6.79%, because it is the contract rate plus 2%, as per OSFI Guideline B-20.
- 5.75%, calculated from the contract rate plus a variable margin.
Correct answer: 6.79%, because it is the contract rate plus 2%, as per OSFI Guideline B-20.
Explanation: Under OSFI Guideline B-20, the qualifying rate for uninsured mortgages is the greater of the contract rate plus 2% (4.79% + 2% = 6.79%) or 5.25%. Since 6.79% is greater than 5.25%, the client will be qualified at 6.79%.
Start free practice for Mortgage Agent Licensing Practice Exam
307 questions · no signup required · 40 free questions per day
More about Mortgage Agent Licensing Practice Exam
Related Questions
- Which of the following is NOT a primary provider of mortgage default insurance in Canada?
- When must a mortgage agent provide the borrower with certain disclosures regarding the proposed mortgage, part
- Michael and Jennifer are applying for a mortgage to purchase a home in Calgary for $700,000. Their combined gr
- Which of the following scenarios would typically lead to a higher mortgage interest rate for a borrower?
- Which type of lender typically offers the most flexible underwriting criteria but often at higher interest rat
- Which of the following bodies is primarily responsible for regulating mortgage brokers and agents in Ontario?
More for Mortgage Agent Licensing Practice Exam candidates
FAQs
Question explanations
- Which of the following is NOT a primary provider of mortgage default insurance in Canada?
- When must a mortgage agent provide the borrower with certain disclosures regarding the proposed mortgage, part
- Michael and Jennifer are applying for a mortgage to purchase a home in Calgary for $700,000. Their combined gr
- Which of the following scenarios would typically lead to a higher mortgage interest rate for a borrower?
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Mortgage Agent Licensing Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.