Low compression in engine

Engine is bad is a term that mechanics should not use.
It is better to just say what they believe to be bad, whether it be a leaking cylinder head gasket, a worn down camshaft lobe, a valve not seating, a broken piston ring, etc., because these things can all be fixed.
A bad engine would basically have to have a cracked engine block for it to be so called "bad".
You mentioned "low compression", did you or someone actually do a compression test and if so what were the readings?

The mechanic did the test stated that it was low. I do not know the reading. He stated that the engine should be replaced.

I think you should ask him again, if it would be less expensive to either replace the engine either with a new engine, rebuilt engine, salvage engine or repair what is there.
Then also ask him what the compression readings were and if he did a compression test on all cylinders or just on number five cylinder. What the readings were and if just low on number five, if he repeated the compression test with a little motor oil in the cylinder, called a wet test to see if maybe it is a piston ring worn down and/or completed a leak-down test to find out exactly where the compression is being lost, from a blown head gasket, a intake or exhaust valve not seating, a broken piston ring/hole in a piston or what?
Have him tell you specifically why the engine is bad and then tell me what he says, because simply replacing the entire engine for something that can be repaired makes no sense to me.

Thanks for your time, it was very helpful.
Will contact you with an update.

Okay, I will be here.