Mortgage Broker Licensing Practice Exam · Question
A borrower is seeking a conventional mortgage with 20% down payment. Their Gross Debt Service (GDS) ratio is 32% and Total Debt Service (TDS) ratio is 40%. The qualifying interest rate for their 5-year fixed mortgage is 5.24%. Based on current OSFI B-20 guidelines, which qualifying rate must be used for this mortgage application?
OSFI Guideline B-20 requires the qualifying rate for uninsured mortgages to be the greater of the contract rate + 2% or 5.25%. In this case, 5.24% + 2% = 7.24%,
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Question: A borrower is seeking a conventional mortgage with 20% down payment. Their Gross Debt Service (GDS) ratio is 32% and Total Debt Service (TDS) ratio is 40%. The qualifying interest rate for their 5-year fixed mortgage is 5.24%. Based on current OSFI B-20 guidelines, which qualifying rate must be used for this mortgage application?
Answer options: ✅ 7.24% (5.24% + 2%)
- 5.25% (Bank of Canada's benchmark rate)
- 5.24% (Contract rate)
- 6.74% (Highest of contract rate + 2% or 5.25%)
Correct answer: 7.24% (5.24% + 2%)
Explanation: OSFI Guideline B-20 requires the qualifying rate for uninsured mortgages to be the greater of the contract rate + 2% or 5.25%. In this case, 5.24% + 2% = 7.24%, which is greater than 5.25%.
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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