Which costs are included in the MRF calculation?

The correct choice, which is reserves, refers to funds set aside for future expenses related to homeownership. In the context of the Monthly Repayment Figure (MRF) calculation, reserves are important because they help borrowers prepare for potential costs beyond their immediate monthly payments. These reserves may cover unexpected repairs, renovations, or other necessary expenses that contribute to the sustainable management of home finances.

In contrast, monthly mortgage payments and annual property taxes are typically elements of a homeowner's recurring expenses but do not represent the broader concept of financial reserves. Home inspection fees are usually considered one-time costs incurred during the home buying process and do not factor into ongoing financial planning represented by reserves. Reserves effectively serve as a financial cushion, supporting long-term homeownership stability and preparedness for future expenditures.