A house is appraised at $298 000 and you have a down payment of $25 000.CMHC charges the following rates on the loan to value ratio: Up to and including 80 percent,1.00 percent;up to 85 percent,1.75 percent;up to 90 percent,2.00 percent;up to 95 percent 2.75 percent.What will be the approximate total amount of the mortgage if the CMHC fee is included in it?
A)$278 460
B)$281 195
C)$278 996
D)$280 508

Question

Quizplus · Accepted Answer

The down payment is $25 000, so the mortgage amount is:
$298 000 - $25 000 = $273 000

The loan to value ratio is:
($273 000 / $298 000) x 100% = 91.61%

Since the loan to value ratio is between 90% and 95%, the CMHC fee is 2.75% of the mortgage amount:
$273 000 x 2.75% = $7 507.50

The total amount of the mortgage with the CMHC fee included is:
$273 000 + $7 507.50 = $280 507.50, which is approximately $280 508.

Therefore, the best choice is D.

A House Is Appraised at $298 000 and You Have