Bianca Andreescu and Sebastian Bunescu have saved $150,000 for a down payment on a house. Their combined annual gross earnings are $90,000 p.a. The sort of houses they are looking at cost $3,600 p.a. in property taxes. They want to avoid paying high ratio mortgage insurance and so they need a down payment of 20%. They estimate closing costs of $5,000. The Indigenous Credit Union of Yukon is offering mortgage rates of 2.4% for a five year term and has a GDS cutoff of 30%. They would amortise the mortgage over 25 years with monthly payments.

Required:

1. What is the maximum price of a house they can buy? (6 marks)
2. If they buy a house for $500,000, what will the first months mortgage payment be? (2 marks)