What interest rate is applied to the mortgage in the scenario presented?

The correct interest rate for the mortgage scenario is 4.75%. This rate may have been determined based on various factors such as current market conditions, the borrower's creditworthiness, the type of mortgage, and any lender-specific pricing structures.

In many cases, the interest rate reflects the overall health of the economy, the Bank of Canada's prime rate, and other macroeconomic indicators. Therefore, a rate of 4.75% suggests that it is likely in line with ongoing trends observed in the market during the specific period referenced—this can encompass base economic rates, competition among lenders, and risk assessment based on the borrower's profile.