I assume that the stages of cash release to the developer follow those of cash rebate. So based on a property price of RM 1.5m, and assuming that the stages are evenly distributed over the 4 years (this should be reasonable), that means (before taking into account of any discount):
Beginning of Year 1: RM150k (first 10%)
Beginning of Year 2: RM405k (30% of the remaining 90%)
Beginning of Year 3: RM472.5k (35% of the remaining 90%)
Beginning of Year 4: RM472.5k (35% of the remaining 90%)
But because the developer is giving you 10% + 2% discount (that means an effective 11.8% discount), you will get this amount back at the beginning of Year 2. Also, you are only getting 70% loan. So your cash flow (outflow) under DIBS is:
Beginning of Year 1: RM150k (first 10%)
Beginning of Year 2: RM123k (30% - 11.8% of the RM 1.5m less the RM150k paid)
And the bank’s release of money would be:
Beginning of Year 2: RM105k
Beginning of Year 3: RM472.5k
Beginning of Year 4: RM472.5k
Now I assume the loan interest of (BLR – 2.5%) remain constant over the 4 years period. The total accrued interest at the end of year 4 would be:
RM 105k * (104.1%^3 – 1) + RM 472.5k * (104.1%^2 – 1) + RM 472.5k * (104.1% - 1) = RM72.3k
If you opt for the cash rebate (2038 sf * RM20 = RM40,760), you would receive:
Beginning of Year 2: RM12,228
Beginning of Year 3: RM14,266
Beginning of Year 4: RM14,266
You can calculate yourself what this income stream is worth to you. If you can yield more than 32.5% a year then by all means you should opt for the cash rebate. Otherwise, I’d recommend you to take the DIBS.