Mortgage Agent Licensing Practice Exam · Question
Michael is purchasing a newly built condo in Halifax for $450,000. He has a down payment of $22,500. Which type of mortgage default insurance premium tier will Michael likely fall under?
Michael's down payment of $22,500 on a $450,000 purchase results in a 5% down payment, meaning a loan-to-value (LTV) ratio of 95% ($427,500 / $450,000). Mortgag
Start free practice for Mortgage Agent Licensing Practice Exam
307 questions · no signup required · 40 free questions per day
Question: Michael is purchasing a newly built condo in Halifax for $450,000. He has a down payment of $22,500. Which type of mortgage default insurance premium tier will Michael likely fall under?
Answer options:
- A premium based on a 90% loan-to-value (LTV). ✅ A premium based on a 95% loan-to-value (LTV).
- A premium based on an 80% loan-to-value (LTV).
- A premium based on a 75% loan-to-value (LTV).
Correct answer: A premium based on a 95% loan-to-value (LTV).
Explanation: Michael's down payment of $22,500 on a $450,000 purchase results in a 5% down payment, meaning a loan-to-value (LTV) ratio of 95% ($427,500 / $450,000). Mortgage default insurance premiums are tiered based on the LTV, and a 95% LTV typically incurs a specific premium rate (e.g., 4.00% for CMHC as of 2024).
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.