John agreed to buy a flat at $6M and paid an earnest money of $10,000 to the seller. He plans finance the purchase by making a down payment of $1.4M and going for a mortgage loan of 25 years. His monthly disposable income is $65,000. The Loan-To-Value ratio is 80% (he is not eligible for the mortgage insurance plan). The following table shows the mortgage plans offered by two banks.

	Bank A	Bank B
One-month HIBOR	0.2%	0.2%
Spread	2%	2.25%
Cash reimbursement	1%	1%
Estimated value of the property	$5M	$5.8M
Interest penalty	No	1% of the mortgage loan for within the 1st year
Maximum loan period	30 years	30 years
Stress test	3%	3%

a. Which mortgage plan should he choose? Why? (7 marks)

b. Why he may not be able to secure the loan from the chosen option? (7 marks)

c. Suggest one way to him for securing the loan. (2 marks)