Mortgage Agent Licensing Practice Exam · Question
What is the primary purpose of the B-20 guidelines and the mortgage stress test in Canada?
The B-20 guidelines and the stress test aim to enhance the stability of the Canadian financial system by ensuring that borrowers are qualified for their mortgag
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Question: What is the primary purpose of the B-20 guidelines and the mortgage stress test in Canada?
Answer options:
- To increase the supply of affordable housing ✅ To ensure borrowers can afford their mortgage payments if interest rates rise or their income changes
- To reduce administrative burden for lenders
- To standardize mortgage product offerings across all financial institutions
Correct answer: To ensure borrowers can afford their mortgage payments if interest rates rise or their income changes
Explanation: The B-20 guidelines and the stress test aim to enhance the stability of the Canadian financial system by ensuring that borrowers are qualified for their mortgages at a higher, more conservative rate. This mitigates the risk of defaults in a rising interest rate environment.
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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?
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