Mr and Mrs Monash have hired your team of financial planners to consult on their intention to
Question:
Mr and Mrs Monash have hired your team of financial planners to consult on their intention to buy their next home.
In5years time, they intend buy a 3 bedroom house in Caulfield to live in. They intend to spend
$1,590,000to buy their house.
Task 1:
Find and present in a business report, the cheapest (lowest interest rate) home loan in the market. You are required to show evidence of your comparison. No evidence of comparison will result in a -2 mark penalty. Evidence would be comparing your recommendation with at least two other loan products which also match all the conditions below.
Find and present in a business report, the cheapest (lowest interest rate) home loan in the market. Mr and Mrs Monash have the following conditions and needs of the loan you present to them:
(if you breach the conditions above or below, -2 marks will be deducted for each breach)
The loan has to be from a Non-bank financial institution
The loan needs to have a Redraw facility
Mr & Mrs Monash wish to make monthly repayments
They wish to borrow money for30 years
They wish to take a fully amortising loan.
They are interested in a Variable rate loan (use comparison rates only)
Mr & Mrs Monash want an LVR of 90% (Assume any loan you research allows the LVR desired and ignore mortgage insurance)
a) Apply financial math to calculate the periodic loan repayment Mr and Mrs Monash must pay.
(show your formula, substitution and working, missing financial math will result in a -4 mark penalty)
b)Today, Mr and Mrs Monash have $1,100.00of disposable income to service their debt at each loan repayment period.
Assuming, their income increases by the current rate of annual inflation, will they be able to afford the periodic loan repayment needed for the loan?
If not, by what nominal annual percentage will they have to grow their disposable income available to service the loan in the future when they buy their house?
If their future income is greater than the loan repayment required, by what percentage is their income greater than the loan payment required?
There are 3 types of interest rates which are 2.55%, 2.78% and 2.79%