The banks have an 80% Loan to Value Ratio (LVR) where the interest rates are expected to be 5.50%pa (serviceability buffer included) over a 30 year loan term with monthly compounding. The buyer expects to pay on top of the purchase price of the property (as owner occupier), a stamp duty on purchase of 3.50% of the purchase price and approximately $4,000 on other purchase costs and inspections.

1. Estimate the max purchase price of a home the buyer can purchase with the total savings based on your buyer's details above and a 20% deposit to match the banks LVR; while avoiding the Lender's Mortgage Insurance by staying below the 80% LVR. (you must show how you arrived at your max price with the methods we showed you) Randomly picking a number is not acceptable.

2. Based on the max price you have estimated above, what is the monthly mortgage repayment for the loan based on the given scenario? Use an 80% LVR to estimate the loan amount based on the Max Purchase price from Question 1