A very question, how many years you guys took for your loan? 10? 20? 30?

I am aware the whole thing is very subjective, but generally will i save a significant amount of money if i take 20years loan instead of 30years?

What is your take when taking loan?

i'll take 20yrs. if possible/affordable, take 15years or less.

I see most will take 30 years loan on paper but will settle the loan in less than 15 years, otherwise pay cash but not many peoples can do that.

Better take the longest duration but with flexibility to pay back faster. You will never know when emergency happens so it is best to have the lowest monthly commitment. In the event that everything goes as planned, you can always opt to finish your loan in half the time or even earlier! Just have to make sure the loan you take provides that flexibility.

Take the longest loan possible so that the payment is low. Your rental should be used to cover your interest rate. If you are looking for own stay, then you should take a loan where you are comfortable in re-paying the loan.

Im considering between 20years and 30 years. Both can afford, 20years a lil' tighter. Am buying for my own stay..any advise?

Why wanna take so less when you can take more? I always settle for longer lar..

yeah take 30 years and if u can pay more each month just do that

since you are tight for 20 year, then just take 30 years la..

More is good and longer is better


*no funny ideas pls*

i take 38 years but intend to finish it in 20 years.

take as long as possible. finish as soon as possible..

seriously, go for longer? I thought longer means more interest to pay..

house loan is different from car loan.

I know there is reducing balance, but anyway just a simple calc:

loan rm200k

30years = rm950/year
20years = rm1200/year

considering that the interest rate is floating, which 1 would i go for? just by paying extra rm250/month, i save 10years of installment. which 1 should i go for?

in the even of the interest go up, which 1 would be a better take?

Depending on what's the purpose - usually this is the practice.
For investment, longer tenor for more cash flow.
For own stay, shorter to get out of debt earlier.

However, with the introduction of flexi loan; if one is on flexi loan....than stretch the loan tenure for more cash flow. But for own stay, try to finish early like mentioned by a lot.

Also, when BLR is low; i.e. interest rate is low; you might want to consider not paying more towards the repayment. Because one can get better for investment. But when loan interest is high, than need to try and settle the loan faster. I'm talking about own stay here.

There's actually lots of things to consider

b00n, if i borrow 200k for 30years, example monthly 1k

so this month i pay extra, say total i pay 5k

ok, out of monthly 1k, say 500 is for the interest while another 500 is to minus from the 200k that i loaned.

when i pay 5k, the additional 4k will go where? 2k to interest + 2k to actual loan? if this is the case, even if i pay up early, over time i actually lost quite alot in interest.

hope you got wad i mean..

for flexi loan, if you pay extra it will go to reduce your principle, which reduce the interest charged.

hi, does it mean if i pay 5k that month, 1k will be deducted as usual (500 for interest + 500 for principle), whilst the rest of 4k goes to principle?

sorry 1st time buyer..

As explained by jphlau.
Anyway, a few thread for you to read if you're interested:
http://forum.lowyat.net/index.php?showtopic=555063&hl=flexi
http://forum.lowyat.net/index.php?showtopic=964244&hl=
http://forum.lowyat.net/index.php?showtopic=990172&hl=
http://forum.lowyat.net/index.php?showtopic=774895&hl=

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Added on September 21, 2009, 1:40 pmYes.
You see, interest is calculated on a reducing principal balance. Today you pay RM1k where RM800 goes to interest and RM200 goes to principal. Next month, the porpotion would be different i.e. RM700 goes to interest and RM300 goes to principal. And towards the end of the tenure, it's RM900 principal and RM100 interest. (just an example to illustrate how mortgage repayment works) You see, although your stated monthly repayment is the same i.e RM1000, the distribution between interest and principal is different as the tenure goes by.

So by reducing the principal, the interest amount charged would be lesser and you indirectly shorten your tenure also as you get to pay off your principal more. So when your principal owing is already RM0, than there's nothing to pay anymore.

Maybe those working in the mortgage loan field can explain better than me

This post has been edited by b00n: Sep 21 2009, 01:41 PM