Breda Clarke has been regularly saving in a local financial institution to have enough money saved for a deposit to obtain a mortgage to purchase her first house - Junior Cycle Business Studies - Question 5 - 2016

1. Reliability and Soundness: Breda considered whether the financial institution was reliable and sound, ensuring her savings would be safe.
2. Interest Rates: She evaluated the interest rates offered, checking if they were competitive and whether the interest earned was subject to DIRT (Deposit Interest Retention Tax).
3. Accessibility: Breda looked at how accessible her savings would be if she needed to withdraw them, and if the institution would help her in future borrowing needs.

A mortgage is a long-term loan used to purchase a private dwelling/house. It is typically secured against the property, meaning the lender can claim the house if the borrower fails to repay the loan.

To calculate the maximum mortgage:

1. First 90% of €220,000:
   $0.90 imes 220,000 = €198,000$
2. Remainder of the house cost:
   $€290,000 - €220,000 = €70,000$
3. Next 80% of the remainder:
   $0.80 imes 70,000 = €56,000$
4. Total Maximum Mortgage:
   $198,000 + 56,000 = €254,000$

Deposit required:
$€290,000 - €254,000 = €36,000$

The rules were imposed to:

1. Maintain economic stability
2. Prevent house prices from rising too quickly
3. Discourage over-borrowing and excessive debt

1. Interest Rate Effects: The impact of the interest rate on her finances and whether she can afford future increases.
2. Financial Stability: Her overall financial situation and commitments to ensure she can meet monthly repayments.
3. Security: Evaluating job security and the ability to cover the mortgage if her financial situation changes.