Mertyl is interested in buying a house worth $335 000 and has a down payment of $40000 .CMHC charges the following rates on the loan to value ratio: Up to and including 80 percent,2.40 percent; up to 85 percent,2.80 percent; up to 90 percent,3.10 percent; up to 95 percent 4.00 percent.What will be the CMHC insurance premium?
A)$9145
B)$8260
C)$7080
D)$11 800

Question

Quizplus · Accepted Answer

The loan amount after the down payment is $335,000 - $40,000 = $295,000. The loan to value ratio is $295,000 / $335,000 = 88.06%, which falls into the "up to 90 percent, 3.10 percent" category. Therefore, the CMHC insurance premium is 3.10% of $295,000 = $9,145.

Mertyl Is Interested in Buying a House Worth $335 000