Good afternoon everyone ,

Currently my housing loan (hxme sxart frm HxBc) offer me as below:

1st year BLR- 2.1

thereafter BLR-1.9

so should i pay more for the first year or i just follow the installment as the bank set ?(can i save from the intrest by paying more on first year ?)



Thank you for your time to view and comment.

This post has been edited by spriggan: Dec 28 2009, 04:38 PM

If you take a loan of RM100k and decide to pay your loan with RM1000 every month. At the end of 5 years, you'll save RM2735.75 interest.

If you decide to invest the extra money at 1% per month. RM1k - normal loan payment.
You won't save the interest but you'll gain a profit of RM12,300.86 at the end of 5 years.


So tell me which one is smarter?

but some will advice since the intrest is low now, we should pay more on the first year then pay as usual thereafter. any comment on that ?

will it depend on whether it is calculated on a daily basis or monthly basis?

tat's not a fair comparison, you r comparing a rate of 3.45%pa with 12%pa.
can u guarantee a risk-free investment with a 1% return per month?

This post has been edited by trojant: Dec 29 2009, 10:32 AM

Ask yourself first, what are you going to do with the extra money if you are not going to pay more at first year.

Justify if the extra money will brings you more benefit than paying the home loan, when I say benefits, it does not always mean numeric return/money, it can be a good vacation, an upgrade courses etc. Life is more than calculating numeric returns.

If you are going to invest the money, think if the return more than your cost (extra home loan interest incured). Also judge your risk appetite.

There is no straight answer to your question, it varies across peoples.

If you fully understand how flexi loan work, i think you wouldn't ask such question already.

Since your loan is flexi loan, why bother how much extra you pay now or then? Just dump in all and whatever cash flow you have in the current account. You no need to decide how much to pay each month because your loan will still automatically deduct only the actual monthly installment. The extra money (if you pay extra) also just sit in the current account only. Take note that even it didn't deduct for the payment, the extra money will still save the same interest for you, because it's flexi loan.

Of cause, if you have better place for your cash, just go for it. If not, just dump it all to your flexi loan current account and leave it there. It will automatically save interest for you already.

I don't guarantee.
I am already doing it.

12% pa is easily achievable by learning the basics.

What are the basics that you are talking about?
I've read some of your post in this forum, and it seems like you are doing very well! But in actual fact, are you really doing that well?
As we all know, talking and doing it is very different.

IMHO, it depends on yourself.

1st Question:
Would you use ur extra money to invest for the 1st year??

2nd Question:
What do you invest??

Can you invest something which can earn you more than what you can save from the interest on the first year? If no, then just pay more for the 1st year lar...

But please dun rush into things. You need some cash flow for yourself too. We live to enjoy our life, not paying for the house.

PNB funds generally give about 6%+ interest each year and they are generally low risk. Those would be better, plus in case of emergencies you also got some hard cash you can fall back on.

Plus if you pay off house loan, at the end of loan period you have nothing, but if you save, at the end of that same period you have a lot of your dividend making money for you.

You have to search my post way before October. The answer you seek is out there.