MRT2 — Mortgage Products & Post-Completion

What MRT2 covers

• •Repayment vs interest-only, and acceptable repayment strategies
• •Product types: fixed, tracker, discount, capped, offset, cashback
• •APRC, fees and early repayment charges
• •Further advances vs second-charge loans — and priority of charges
• •Product transfers vs remortgages
• •Buildings insurance and reinstatement value
• •Arrears: MCOB 13 fairness and the forbearance toolkit
• •Possession as a last resort, court powers and sale shortfalls
• •Redemption and discharge of the legal charge

3 free MRT2 practice questions

Straight from Mock Paper 1, in the real exam style — no sign-up, no paywall.

1. Q1.In the early years of a capital-and-interest (repayment) mortgage, the monthly payment is made up of:

   1. AMostly interest, with a small capital element that grows as the balance falls
   2. BMostly capital, with the interest element increasing over time as the charge on the balance compounds
   3. CEqual parts capital and interest throughout
   4. DInterest only, with capital starting in year five
   Reveal the answer

   A is correct. Interest is charged on the outstanding balance, which is largest at the start — so early payments are interest-heavy. As the balance reduces, more of each level payment repays capital, accelerating towards the end of the term.

2. Q2.For a new interest-only residential mortgage, MCOB requires the lender to:

   1. AEvidence a credible repayment strategy at outset and check it at least once during the term
   2. BAccept 'sale of the property' from any borrower, since MCOB treats the security itself as an automatically acceptable strategy
   3. CRequire an endowment policy specifically
   4. DConvert the loan to repayment automatically after ten years
   Reveal the answer

   A is correct. Post-MMR rules require a clearly understood and credible repayment strategy, evidenced at outset, with at least one mid-term check. Downsizing can qualify only where genuinely plausible (sufficient equity); no particular vehicle is mandated.

3. Q3.A borrower's endowment provider writes warning of a projected shortfall against the interest-only mortgage it supports. Appropriate responses include all of the following EXCEPT:

   1. AIgnoring the letter, because projections always recover in time
   2. BSwitching part of the mortgage to a repayment basis
   3. CIncreasing savings or making regular capital overpayments to close the gap
   4. DReviewing the position with an adviser to quantify the shortfall and agree a remedy
   Reveal the answer

   A is correct. Re-projection letters (the old red/amber/green system) exist precisely because shortfalls rarely fix themselves. Part-conversion to repayment, additional saving or overpayment, and advice are all standard remedies; inaction is the only clearly wrong answer.

How to pass MRT2

• ✓Learn each product type as a one-liner — the exam tests the differences, not the definitions.
• ✓ERC and offset calculations are free marks once you know the method.
• ✓For arrears questions the theme is always the same: engage, treat fairly, possession last.

MRT2 exam — common questions