Mortgage Math Practice Questions for the MLO Exam

Updated October 20, 2026

Practice the calculations the SAFE MLO test uses: DTI, LTV and CLTV, discount points, prepaid interest, and payment math. Each of the 10 questions below shows the answer and an explanation. The formulas are on our mortgage math formulas page.

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10 math questions

1. A borrower earns $13,000 gross per month. The proposed housing payment (PITI) is $4,200, and other monthly debts total $750. What is the front-end (housing) ratio?
  1. 5.8%
  2. 34.3%
  3. 32.3%
  4. 38.1%
Show answer and explanation

Answer: C. 32.3%
Correct — housing ÷ gross income = $4,200 ÷ $13,000 = 32.3%.

Source: CFPB: Debt-to-income ratio

2. Gross monthly income is $8,000. Proposed PITI is $2,200, a car payment is $585, and minimum credit card payments total $390. What is the back-end DTI?
  1. 34.8%
  2. 39.7%
  3. 44.7%
  4. 27.5%
Show answer and explanation

Answer: B. 39.7%
Correct — (PITI + all monthly debts) ÷ gross income = $3,175 ÷ $8,000 = 39.7%.

Source: CFPB: Debt-to-income ratio

3. Purchase price $505,000, appraised value $495,000, loan amount $477,700. What is the LTV?
  1. 96.5%
  2. 94.6%
  3. 3.5%
  4. 99.0%
Show answer and explanation

Answer: A. 96.5%
Correct — LTV uses the lesser of price or appraised value: $477,700 ÷ $495,000 = 96.5%.

Source: HUD Handbook 4000.1 II.A (Adjusted Value = lesser of price or value)

4. A home is valued at $530,000. The borrower has a first mortgage of $398,000 and a second mortgage of $80,000. What is the CLTV?
  1. 90.2%
  2. 75.1%
  3. 15.1%
  4. 95.2%
Show answer and explanation

Answer: A. 90.2%
Correct — CLTV = all liens ÷ value = $478,000 ÷ $530,000.

Source: CFPB: Loan-to-value ratio (CLTV applies the same ratio to all liens)

5. How much do 0.5 discount points cost on a $620,000 loan?
  1. $310.00
  2. $9,300.00
  3. $3,100.00
  4. $31,000.00
Show answer and explanation

Answer: C. $3,100.00
Correct — 1 point = 1% of the loan amount: $620,000 × 0.5% = $3,100.00.

Source: CFPB: Points and lender credits

6. A $430,000 loan at 6% closes on June 21. Prepaid interest is charged from the closing date through June 30, inclusive, using a 365-day year. What is the prepaid interest?
  1. $2,150.00
  2. $636.16
  3. $777.53
  4. $706.85
Show answer and explanation

Answer: D. $706.85
Correct — daily interest = $430,000 × 6% ÷ 365 = $70.68. 10 days (June 21–30 inclusive) = $706.85.

Source: 12 CFR 1026.37(g)(2)(iii)

7. An ARM starts at 6.25% with 1/1/5 caps and a 2.75% margin. At the first adjustment, the index is 5.25%. What is the new rate?
  1. 11.25%
  2. 7.25%
  3. 8.00%
  4. 5.25%
Show answer and explanation

Answer: B. 7.25%
Correct — fully indexed = 5.25% + 2.75% = 8.00%, capped at 6.25% + 1% = 7.25%.

Source: 12 CFR 1026.37(j)(6)(ii)

8. A borrower earns $13,500 gross per month. The proposed housing payment (PITI) is $3,625, and other monthly debts total $1,500. What is the front-end (housing) ratio?
  1. 26.9%
  2. 11.1%
  3. 38.0%
  4. 30.2%
Show answer and explanation

Answer: A. 26.9%
Correct — housing ÷ gross income = $3,625 ÷ $13,500 = 26.9%.

Source: CFPB: Debt-to-income ratio

9. A borrower is paid $2,450.00 gross every two weeks (biweekly). What is the monthly qualifying income?
  1. $5,308.33
  2. $63,700.00
  3. $4,900.00
  4. $10,616.67
Show answer and explanation

Answer: A. $5,308.33
Correct — biweekly means 26 paychecks a year: $2,450.00 × 26 ÷ 12 = $5,308.33.

Source: 12 CFR 1026.43(c)(2)(i)

10. Purchase price $265,000, appraised value $270,000, loan amount $238,500. What is the LTV?
  1. 90.0%
  2. 10.0%
  3. 88.3%
  4. 92.5%
Show answer and explanation

Answer: A. 90.0%
Correct — LTV uses the lesser of price or appraised value: $238,500 ÷ $265,000 = 90.0%.

Source: HUD Handbook 4000.1 II.A (Adjusted Value = lesser of price or value)

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FAQ

What math is on the MLO exam?

Calculations such as debt-to-income, loan-to-value, discount points, prepaid interest, and ARM adjustments appear in the origination activities area.

How should I study mortgage math?

Learn each formula, then work timed problems until the steps are automatic.

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