Free CeMAP Practice Questions: Test Your Knowledge
Put Your CeMAP Knowledge to the Test
One of the most effective ways to prepare for CeMAP is to practise with realistic multiple-choice questions. Rather than simply re-reading your notes, testing yourself forces you to retrieve information from memory — a technique known as active recall, which research across 48,000+ learners consistently shows is one of the best ways to learn.
Below you will find 15 original sample questions covering all three CeMAP modules. Each question has four options (A-D), followed by the correct answer and a brief explanation. Use these to identify your strengths and spot any knowledge gaps before exam day.
Module 1: Financial Services, Regulation and Ethics
Question 1
Which organisation is responsible for the prudential regulation of banks and building societies in the UK?
A) The Financial Conduct Authority (FCA) B) The Prudential Regulation Authority (PRA) C) The Financial Ombudsman Service (FOS) D) HM Treasury
Answer: B — The PRA, part of the Bank of England, is responsible for prudential regulation of deposit-takers, insurers, and designated investment firms. The FCA handles conduct regulation.
Question 2
Under the FCA's Consumer Duty, which of the following is NOT one of the four outcomes firms must deliver?
A) Products and services B) Price and value C) Complaint resolution timescales D) Consumer understanding
Answer: C — The four Consumer Duty outcomes are products and services, price and value, consumer understanding, and consumer support. Complaint resolution timescales are covered under separate FCA rules, not the Consumer Duty framework.
Question 3
What is the maximum compensation limit per eligible person, per authorised firm, under the Financial Services Compensation Scheme (FSCS) for deposits?
A) £50,000
B) £75,000
C) £85,000
D) £100,000
Answer: C — The FSCS protects eligible deposits up to £85,000 per person, per authorised firm. This is a frequently tested figure in the Module 1 exam.
Question 4
Which of the following best describes the FCA's role?
A) Setting interest rates for the UK economy B) Regulating the conduct of financial services firms and protecting consumers C) Collecting taxes on financial transactions D) Managing the UK national debt
Answer: B — The FCA is the conduct regulator for financial services firms in the UK. Its statutory objectives include protecting consumers, enhancing market integrity, and promoting competition.
Question 5
A client wishes to make a complaint about their mortgage adviser. They have complained to the firm but are unhappy with the response. What is the next step?
A) Contact the PRA B) Contact the Financial Ombudsman Service (FOS) C) Contact HM Treasury D) Issue court proceedings immediately
Answer: B — If a client is dissatisfied with a firm's final response to a complaint (or eight weeks have passed without a response), they can refer the matter to the Financial Ombudsman Service (FOS) free of charge.
Module 2: Mortgages
Question 6
A property is valued at £250,000 and the borrower is seeking a mortgage of £200,000. What is the loan-to-value (LTV) ratio?
A) 70% B) 75% C) 80% D) 85%
Answer: C — LTV is calculated as (loan amount / property value) x 100. So £200,000 / £250,000 x 100 = 80%.
Question 7
Which type of mortgage allows the borrower to pay only the interest each month, with the full capital balance remaining due at the end of the term?
A) Repayment mortgage B) Interest-only mortgage C) Offset mortgage D) Flexible mortgage
Answer: B — With an interest-only mortgage, the borrower pays only the interest each month. The original loan amount must be repaid in full at the end of the mortgage term, usually through a repayment vehicle such as investments or sale of the property.
Question 8
Under MCOB rules, when must a lender provide the borrower with a binding mortgage offer?
A) At the initial enquiry stage B) After the property valuation and underwriting have been completed C) Only after the borrower has exchanged contracts on the property D) On the day of completion
Answer: B — Under the FCA's Mortgages and Home Finance: Conduct of Business (MCOB) rules, a binding mortgage offer is issued after the lender has completed its underwriting process, including the property valuation.
Question 9
What is the role of a conveyancer in the mortgage process?
A) To value the property on behalf of the lender B) To handle the legal transfer of property ownership C) To assess the borrower's creditworthiness D) To arrange buildings insurance
Answer: B — A conveyancer (either a solicitor or licensed conveyancer) handles the legal aspects of transferring property ownership, including title searches, managing the exchange of contracts, and completing the transaction.
Question 10
A tracker mortgage is best described as a mortgage where the interest rate:
A) Is fixed for the entire term B) Tracks the Bank of England base rate by a set margin C) Is set at the lender's discretion and can change at any time D) Reduces automatically each year
Answer: B — A tracker mortgage has an interest rate that moves in line with the Bank of England base rate, plus or minus a set percentage margin. If the base rate rises by 0.25%, the borrower's rate also rises by 0.25%.
Module 3: Assessment of Mortgage Advice Knowledge
Module 3 questions are based on case-study scenarios. Read each scenario carefully before answering.
Question 11
Sarah, aged 32, is a first-time buyer with a gross annual income of £45,000. She has £30,000 in savings and is looking to buy a flat valued at £220,000. She has no debts and a good credit history. Which of the following mortgage amounts would give her the lowest LTV ratio?
A) £190,000
B) £195,000
C) £200,000
D) £180,000
Answer: D — The lowest mortgage amount produces the lowest LTV. £180,000 / £220,000 = 81.8% LTV. She would need a £40,000 deposit, which exceeds her savings, so in practice she could not choose this option without additional funds — but the question asks purely about LTV.
Question 12
James and Priya are buying a house for £350,000. James works full-time earning £55,000 per year. Priya works part-time earning £18,000 per year. They have a joint deposit of £70,000 and an outstanding personal loan with £8,000 remaining. When assessing affordability, the lender will most likely:
A) Consider only James's income as the higher earner B) Consider their joint income minus committed expenditure including the personal loan C) Ignore the personal loan as it is unsecured D) Require the personal loan to be fully repaid before considering the application
Answer: B — Lenders assess affordability based on total household income minus committed expenditure. Outstanding debts such as personal loans are factored into affordability calculations as they reduce the amount of disposable income available for mortgage payments.
Question 13
A client couple are remortgaging their home, currently valued at £300,000, with £180,000 remaining on their existing mortgage. Their current fixed rate is ending and they want to avoid moving to the lender's standard variable rate (SVR). What is the most appropriate first step for their adviser?
A) Recommend they immediately switch to a tracker mortgage with their current lender B) Conduct a full review of their circumstances and research the whole of market for suitable products C) Advise them to stay on the SVR as it offers the most flexibility D) Recommend the cheapest two-year fixed rate currently available
Answer: B — An adviser must always conduct a thorough review of the client's circumstances before making any recommendation. This includes a fact-find, assessing affordability, and researching the whole of market (if the adviser is independent) to find the most suitable product.
Question 14
Tom is self-employed and has been trading for 18 months. He approaches an adviser for a mortgage. Which of the following is the most accurate statement about his application?
A) He cannot apply for a mortgage until he has been trading for at least three years B) Most lenders require at least two years of accounts, so his options may be limited C) Self-employed applicants are assessed identically to employed applicants D) He will automatically be offered a higher interest rate due to his employment status
Answer: B — Most mainstream lenders require self-employed applicants to provide at least two years of trading accounts or tax returns. With only 18 months of trading history, Tom's options are more limited, though some specialist lenders may consider his application.
Question 15
Maria is purchasing a buy-to-let property for £200,000 with a 25% deposit. She plans to charge rent of £950 per month. A buy-to-let lender typically requires the rental income to cover at least 125% of the monthly mortgage payment. If the monthly mortgage payment is £720, does the rental income meet this requirement?
A) No, because £950 is less than £1,000
B) Yes, because £950 exceeds 125% of £720
C) No, because the deposit is too small for buy-to-let
D) Yes, but only if Maria has additional income from employment
Answer: B — 125% of £720 = £900. Maria's expected rent of £950 per month exceeds this threshold, so the rental income meets the lender's typical requirement. A 25% deposit (75% LTV) is also standard for buy-to-let lending.
How Did You Do?
If you scored 12 or above, you have a strong foundation across all three modules. Keep practising to build confidence and speed for exam day.
If you scored 8-11, you are on the right track but have some knowledge gaps to address. Review the explanations for any questions you got wrong and revisit those topic areas.
If you scored 7 or below, do not worry — that is exactly why practice questions exist. Identifying weak areas now means you can focus your study time where it matters most.
Want More Practice Questions?
These 15 questions are just a taster. To properly prepare for the CeMAP exams, you need access to hundreds of questions covering every topic in the syllabus, with detailed explanations for each answer.
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