Ontario Real Estate Licensing Exam Practice · Question
What is the primary purpose of a 'stress test' for mortgage qualification in Canada?
The mortgage stress test, enacted by OSFI, requires lenders to qualify borrowers at a higher interest rate than their contracted rate. This ensures borrowers ca
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Question: What is the primary purpose of a 'stress test' for mortgage qualification in Canada?
Answer options:
- To assess the condition and structural integrity of the property ✅ To determine if the borrower can afford mortgage payments if interest rates increase
- To review the borrower's credit score history over 10 years
- To calculate the final closing costs associated with the mortgage
Correct answer: To determine if the borrower can afford mortgage payments if interest rates increase
Explanation: The mortgage stress test, enacted by OSFI, requires lenders to qualify borrowers at a higher interest rate than their contracted rate. This ensures borrowers can still afford their mortgage payments if interest rates rise in the future, promoting financial stability.
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