Dear

Base rate + spread rate = Effective lending rate

Base rate will alter according to banks need from time to time, hence it will affect your EFL

Spread rate will be fixed throughout the loan tenure.

Hence, banker like to say lower spread rate will be better:

Example:

A) 4% + 0.5% = 4.5% effective lending rate
B) 4.1% + 0.4%=4.5% effective lending rate

Both ELR is the same, but the spread rate is different.

Hence in common perspective sense, people will chose the lower spread rate as it is fixed throughout loan tenure. Thus will say B is better.

But actual sense, there's no best solutions or answer for this. Because, lower spread rate doesn't secure the bank from increasing the base rate in the future and ELR is higher than A in the future.

It's very subjective,

For me, if the ELR is the same, spread rate different isn't differ by alot, I will chose according to few criteria as below:

A. Banks that are easily accessible to your vicinity, why take loan offer form bank when you need them, you need to drive 20-40km.

B. Customer services, go with bank that offer tremendous value added service, try calling their hotline whether easily reached and are they responsive and helpful. In long term, this will lessen any unwanted hassle.

C. Semi or Full flexi that suits your criteria. SOmetimes, different banks semi and full flexi mechanism is different

D. Does the loan package has the right features that you need? Finance legal fees, semi/full/fixed/islamic loan ? lock in period or without? defaultment period ? loan account is it link to saving or current account?

E. Does the consultant serves you well?

etc all this that must put into consideration into long term perspectives instead of just interest rate. Effective interest rate right now is quite short term view.

Full flexi:

1) current account tied to loan account
2) auto debit from current account at month end and interest is calculated based on outstanding balance minus amount in current account
3) maintenance charge of RM10 per month
4) setup/ processing fee of Rm200 (certain bank)
5)The liquidity comes in the form of an ATM card or a linked CASA account to the housing loan. 
Example: You have a shop that is opened Monday to Satuday, rest on Sunday. On Saturday, you deposit all your proceeds of the week into the flexi account, on Sunday, you would save [(your-HL-interest-rate)/365]*AmountDeposited worth of interest. On Monday, you withdraw the money to run your business
6) Withdrawal of money or crediting of money through ATM,CHEQUE,OVER THE COUNTER, or online

Semi Flexi

semi flexi package typically has these features:
1) requires you to phone in to indicate the extra payment as early settlement of advance payments
2) if you fail to indicate, you will be charged 1% (some banks do this afaik)
3) if you indicate advance payment, no additional interest is saved as "advance" payment will only be credited to your loan account when it reaches your cycle date, so it is plain advance payments. and must be in multiple of your monthly payment.
4) For redrawable prepayments, you need to indicate separately and Redraw charge of RM50 is imposed (M*B charge Rm25)
5) Withdrawal of money or crediting of money through Cheque or Over the counter