Ana’s home plan

Fictional case

It is April 2027. Lantern Coffee has finished its first year, and Ana Lim now pays herself $48,000 a year from it. Her emergency fund stays where it is. She wants to buy a $300,000 flat in five years, putting down 20%, and has asked you two questions: how much she must save each month to get there, and which mortgage to take when she does. Ana, the flat, the accounts and every rate are fictional.

What Ana knows in April 2027 (all fictional)
Item	Figure
Flat she hopes to buy in April 2032	$300,000
Deposit she wants to put down	20% of the price
Savings account for the deposit	3.6% a year, compounded monthly (variable)
30-year fixed-rate mortgage	6.0% a year, monthly payments
15-year fixed-rate mortgage	5.4% a year, monthly payments
Discount point on the 30-year loan	pay 1% of the loan up front to cut the rate by 0.25 percentage points
Her pay from Lantern	$48,000 a year
Inflation she assumes	2.8% a year

You will plan the saving, compare the two mortgages, decide whether the discount point is worth paying, see where the loan stands after five years and put the payments into the prices of April 2032, when the loan starts. Then you will write Ana a short recommendation. Assume each rate stays fixed at the figure shown, payments and deposits are made at the end of each month unless a question says otherwise, and taxes, insurance and fees beyond the point are left out. Keep at least six decimal places in every factor and round only the final answer.

What you will produce

The monthly saving that builds the $60,000 deposit in five years, and how much of the deposit is interest.
The monthly payment and total interest of each mortgage, and the payment as a share of Ana’s monthly pay.
A decision on the discount point, with its simple break-even and its value if Ana sells after five years.
The balance owed after five years, and the mortgage’s real cost and real burden under 2.8% inflation.
A recommendation to Ana of about 200–300 words.

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