Question

What is the maximum prepayment penalty on residential mortgages in the first year of the loan?

A) 1% of the remaining balance.
B) 2% of the remaining balance.
C) 3% of the remaining balance.
D) No prepayment penalty in the first year.

Answer 1

The maximum prepayment penalty on residential mortgages in the first year of the loan is no prepayment penalty.

Step-by-step explanation:

The maximum prepayment penalty on residential mortgages in the first year of the loan is No prepayment penalty in the first year (Option D). This means that borrowers are not required to pay any additional fees or penalties if they decide to pay off their mortgage early within the first year.