Mortgage Broker Licensing Practice Exam · Question
For a fixed-rate closed mortgage, lenders typically charge a prepayment penalty equal to the GREATER of:
Most fixed-rate closed mortgages use the greater of 3 months' interest or the Interest Rate Differential (IRD).
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Question: For a fixed-rate closed mortgage, lenders typically charge a prepayment penalty equal to the GREATER of:
Answer options: ✅ 3 months' interest, or the Interest Rate Differential (IRD)
- 3 months' interest only
- 6 months' interest, or 1% of the balance
- 1% of the original principal
Correct answer: 3 months' interest, or the Interest Rate Differential (IRD)
Explanation: Most fixed-rate closed mortgages use the greater of 3 months' interest or the Interest Rate Differential (IRD).
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Related Questions
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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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