Mortgage Agent Licensing Practice Exam · Question
A fixed-rate mortgage offers which of the following benefits to a borrower?
A fixed-rate mortgage provides payment stability by locking in the interest rate for the term, thereby protecting the borrower from any increases in market inte
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Question: A fixed-rate mortgage offers which of the following benefits to a borrower?
Answer options:
- Lower interest rates for the entire term compared to variable rates. ✅ Protection against future interest rate increases.
- More flexibility to make prepayments without penalty.
- The ability to convert to a variable rate at any time.
Correct answer: Protection against future interest rate increases.
Explanation: A fixed-rate mortgage provides payment stability by locking in the interest rate for the term, thereby protecting the borrower from any increases in market interest rates. Variable rates often start lower, and prepayment flexibility varies by lender and product.
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Question explanations
- Which of the following is NOT a primary provider of mortgage default insurance in Canada?
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