You are about to purchase a new house costing $$300$K and save saved enough for the required down payment of $20\%.$ The nominal mortgage interest rate is $5\%$ per year and you also earn $3\%$ per year on your savings. The expected inflation rate is $2\%$ per year.

Interest payments are tax deductible although interest received from saving is not tax deductible.

Assume you are in the $30\%$ tax bracket and interest paid and received and taxes paid are paid at the end of the year.

Maintenance costs are $6\%$ of the value of the house and all expenses are also paid at the end of the year.

If maintenance is done, the house maintains its real value. There are no other costs.

What is the expected after$-$tax real interest rate on the home mortgage

What is the user cost of the house