O-the-Plan Option: A real-estate agent told you that as a rst-time homeowner, your friend will be eligible to receive a rst home owner's grant of $10,000 if you buy a brand new apartment. Luckily, there is a development project oering a new apartment that is almost the same as the one that your friend likes, and it also priced at $560,000. However, this new property is currently selling as 'o-the-plan' ('o-the-plan' means a property that hasn't been built yet). It will be exactly two years before your apartment settles. For an o the plan purchase, you will be paying 10% deposit when you sign the contract with a developer (you will sign it today) and the remaining balance will due on the settlement date. Your 10% deposit with the developer will be earning an interest at 4% p.a. (compounded monthly). Let's assume on the settlement date. You decide to pay another 10% of the purchase price. The $10,000 grant will be credited to your saving account on the settlement date (for easy calculation purposes) and you will use it to pay o your mortgage. The remaining balance will be nanced by the mortgage, where the rst repayment happens one month after the settlement date. The application fee for this loan is $3,000 in cash on the settlement date. You will take out a 30-year mortgage paying a xed at 5% p.a. (compounded monthly). Meanwhile, you will be renting a unit before your apartment is settled. The monthly expense for renting is $880 (due at the beginning of every month, beginning today).