as mentioned, reincurring the loan agreement cost will be not worth it, especially when your loan amount is so low already, refinancing it will incur a higher interest rate in fact since the borrowing amount is so little. The bank won't want to waste their time on you with such a low amount unless you're willing to pay a higher interest rate.

You dont know what the bank will or wont do. Calling them and asking them to consider should not cost you anything. Even accepting the new rate will not cost you anything (no refinance, no valuation, no legal fees, no stamp duty involved)

My only concern is if the rate reduces then I'm lock down at a rate not lower than that. In 2018, the interest rate is 4.46%. A year from now it's 4.71%. That's really crazy. I still keep record but stop doing so since mid of last year. Do you think it will go lower say in 2 years time if that's the period that OCBC offer for reduce interest rate?

No one can tell what's the market outlook, you're bound by the fluctuating interest rate until you pay off the RM60k.

the rates are quoted like this: BR + [spread]

or if your loan is older, then it is quoted as: BLR - [spread]

All you have to look is to get a better quotation. Even if you stay with the current bank's offer, and if the BLR or BR increases, you would still have to pay more, than if you had taken the revised rate

Guys,

My relative's had started to pay their house loan in advance since july last year. Their loan is from HLB. According to their agent (which is not currently with HLB already), it is a full flexi loan, which therefore "profit" (which is "loan interest" but in islamic term) is calculated daily, and any advance payment should result in lower overall loan repayment. That should also means that by right we should see decrease in "profit" charged, but based on the loan statement, doesn't seem like it.

I'm not beside them now therefore I can't study the loan agreement. Can anyone enlighten me based on the attached statement? Thanks in advanced.

Dear sifus... so what is the right spread/difference in interest rate to consider worth to refinance? And also based on what refinance amount?

1. Nope, from what I can tell, the advanced payment has reduced the loan balance used to calculate the interests (profit paid) .

a. based on the profit paid on 1st July (for June interest accrued of 30 days) it is RM1,836

b. based on the profit paid on 1st December (for November interest accrued of 30 days) it is RM1,518

Difference is RM318

I noticed there was about RM80k worth of advanced payment made between the 2 dates I mentioned above in (1) and (2)

Assumption: interest rate is 4.5%

RM80,000 x 4.50% p.a. / 12 = RM300/m

Which is about the same as the difference between the profit paid for the two dates above.

Congratulations.

Try looking at it this way, by calculating the "savings" vs the costs: Each time you refinance, you would incur about 2% moving cost - legal fees, stamp duty, valuation. You interest rates are charged on a daily basis, but quoted per annum (p.a.).

So if you find out the difference between the best rate approvable vs. your current interest rate charged by your bank, and compare it to the 2% mentioned earlier, you can find out how many years it would take for you to start "breaking even" with the moving costs.

For example: the best rate approvable is 4.5%, you are being charged 4.9% with your current bank. Difference is 0.4%. Moving cost is 2%, so it takes 5 years for you to break even, and you would start saving money beyond that.

This is a very gross way of calculating it, but it should give you a guideline whether to proceed or otherwise.

There are those who are paying more than 6% interests, and refinancing to get better rates would definitely help.

Best reason to refinance is to unlock the value of the property, so you can reinvest the cash-out into other things

This post has been edited by wild_card_my: Apr 22 2019, 08:53 AM

effectively if you look into your statement, your interest payable in the following month was reduce from 1800+ to 1500+, so the prepayment did reduce your payable interest.

feasible amount would be around 0.5% difference if you're just looking to reduce on your current interest rate because of the moving cost, it will take generally 3 - 8 years depending on interest rate that you are refinancing into in order to get even.

Aside from just interest rate alone, people look into refinancing for option to cash out / change name within the SPA or Loan Agreement

Insurance agent,

not the following month la. July through December are a few months apart. The differences of RM300 in interest (profit) payable only took place only after further advanced payments throughout the months...

Thank you both of you sirs.

I saw in their statement, december "profit" is higher than november, I'm guessing that is because December has more days than November?

yes, the interest rates are calculated on a daily rest. more days in the month = higher payable interests in total

yea it's calculated on daily rest

Hi, doing my first home purchase, self business. currently applied mortgage from HLB and CIMB. waiting respond from the housing loan agent of property negotiator.
Agent tells me, he only apply for 2 banks because, applying from too many banks at the same time will make my record not nice.
Property is a subsale landed KL.

Booking form was signed on 16 April. dont know if its too late to apply other banks. Any mortgage agent?

This post has been edited by DirectorLee: Apr 26 2019, 09:04 PM

Recommend to hold off from applying to too many. HLBB and CIMB are kind to business owners such as yourself. Consider getting PBB in the loop as well. But 3 should be good, if any of these 3 don't make it, unlikely other banks will too.

you can submit up to 5 banks.

That depends on when is your due date that you need to get the approval for the loan within the booking form.

Thanks for ur input. I guess the mortgage agent is doing the right thing then.

Insurance agent,

Is there a reason as to why the limit is set to "up to 5 banks"? Why not up to 10 banks? Even better, why bother with a limit, why not just submit the application to all 26 commercial banks in Malaysia?

I am not saying the three (3) is the right number, or that five (5)is the wrong number; but in the end of the day, you really only need one bank to sign the letter offer with. If the client needs to apply to as many as five banks, what is the point that they are employing your services? Where is the value-added service that you are giving them, as an insurance-cum-mortgage-agent?

I sincerely believe that there is enough overlap between banks' specialties in terms of the applicants' financial, employment, property, financing purposes and other criteria as well as situations, in that simultaneous submissions to three banks is more than enough to get a good feedback on the success rate of the loan application.

I would say we need to work smarter, not harder: the bankers that you partner up with will appreciate it. You can't throw cases at them, expect them to process the cases, without any form of submission strategy.

A good mortgage broker (and I am not saying that I am) would be able to look at the applicant's CCRIS (which we can print on behalf of the clients, with their permissions), run some DSR calculations based on each banks' commitment and income recognition, and predict the success rate of the application. And for those with low rates of success (burst DSR based on the low DSR limit for particular banks, like MBB and PBB for example), to forgo or allow the client to submit on their own.

Whatever you do, I think it is most efficient if we study the clients' situation before shotgunning the submissions to as many as five banks. Not only you are wasting the bankers' time, you are also not being efficient since you would have to process each applications.

You are most welcome. Applying for a mortgage and getting them successfully approved is a combination of arts and science. Sure, it may seem like you are increasing your chance of approval by submitting to as many banks as you could, but the "art" potion, which is also related to the "human" portion will be severely affected. Bankers don't like to handle cases where they are 3rd, 4th, 5th choices.

And they can see in your CCRIS the submissions that you have made to banks other than their own.

I see i see. Well, now i guess just have to pray. my dsr is low, less than 10%. but my business is just one year + old. So don't know how it will go. Cause rumor says that, mortgage now very strict, business has to be at least 3 years old...

Hi, I'm an expat working with an international NGO in Malaysia (not on permanent resident visa). Monthly income about 25k+

I'm exploring the possibility of buying a unit for own use. I wanted to get a general idea of the availability of mortgage finance to expats from local banks and what is the margin/ tenure of financing that could be obtained, although I understand, that it would depend on the specifics of the case.