Hi.

1. Yes, the new rule is applicable if you want to refinance from bank A to bank B

2. The GOOD news is that, you can still choose so the the repayment of the refinancing portion to be at 35-years (maximum tenure for housing loan). So that means if you have an outstanding balance of RM300k, and you need another 100k, the new loan of RM400k CAN be repaid in 35 years.

The BAD news is that, the 100k (the cash-out portion) will be calculated by the banks as if you are going to repay it in 10 years. What does this mean? Illustration below. From the bank's view, your monthly commitment would jump from RM460 a month to RM1026 a month! This would burst your Debt-service-ratio (DSR) for most people!

However, if you do get your loan approved, the repayment schedule for the loan will still based on the 35years tenure, for this example, your repayment for the RM100,000 cash-out portion would remain at RM460 a month and not RM1026 a month.

10-year tenure calculation


35-year tenure calculation


3. So if I get you right, your would be okay with this since the repayment would still be low, whether or not your loan would be approved is a whole different story.

Hi Zell, yes although you were confused (Sorry about that), you are correct in that the new loan of RM400k can be repaid in 35 years (or whatever maximum tenure you are allowed to based on your current age.

I cannot speak for all banks, but I know of 3 banks that allow you to repay both the refinancing portion AND the cash-out portion in 35 years.

OCBC, Bank Islam, Maybank