No.

Quite a bit of facts has been presented here, but here is something that most miss out - with BR there doesn't need to be an OPR change for BR to move.

BR is supposed to introduce risk based pricing, and that means if for some reason a bank's COF increases regardless of OPR movements, they will adjust their BR. A good example is the beginning of Basel 3 compliance, where their liquidity requirements are more strict than before, thus causing a big requirement for liquid funds 3m and above. This is why you see FD rates on the longer tenure shoot up so high despite no change in OPR since July, which all the banks are desperate for more liquidity to meet requirements. If the banks are still operating on a pure BLR basis, it is highly likely that BLR would not change since they are quite tied to OPR (my memory fails me here, but I think Maybank tried to be a delinquent once and changed their BLR moving out from the other banks' BLR vicinity - they got the tap on the shoulder). However, I believe the banks were told not to adjust BR for the short term to get consumers used to it.

Note that means in a normal situation, BR will change in anticipation of rate movements since KLIBOR is submitted by banks and reflects their view on rate movements (unlike BLR which only changes few days AFTER actual movement of OPR).

Note how the huge local banks have an advantage with lower BR since they have larger CASA deposits which gives extremely low interest rates, compared to FD, hence reducing their COF leading to lower BR. Foreign banks are at a disadvantage here, having limited retail reach with branches and network.

Thank bro..

most likely I will go to Bank A: BLR-2.47% (4.38%) (have to pay all the cost)

sometimes, good offer but bad attitude of the banker may stop you to accept the offer

we need a good banker

This post has been edited by asiatrader98: Jan 22 2015, 09:59 PM

just to share

this is the good article about this BLR/BR

Mortgage Finanancing 2015

Correct, it doesn't need the OPR to move in order to change the BR as it depends on which benchmark cost of fund is used. Nevertheless, as the OPR moves it is very likely the BR will move in tandem as the OPR is the key benchmark rate. Hence, when OPR moves the cost of funds of the financial institutions will definitely be affected. However if the 3M KLIBOR is used as the benchmark cost of funds for the BR (90% of the financial service providers opt of 3M KLIBOR), very likely that before the OPR hike / cut during the MPC meeting, the KLIBOR would have already moved weeks earlier. So, the BR could have been revised already before the OPR hike / cut - so long as it fits into the banks' internal policy governing the BR.

As required by BNM the current BR needs to stay unchanged for 3 months to let the public familiarise with it. After that the movement in BR should be guided by the internal policy of the respective banks.

This post has been edited by Jasoncat: Jan 22 2015, 10:56 PM

so in other words the movement of the BR is most volatile

I won't say that movement of BR will be more volatile than BLR as the same fundamentals that affect BLR would impact the BR too.

Hi all sifus, just last week, HxB offered me BR 3.99 + spread 0.56 = 4.55% for 35 years tenure. My property is RM420k and the approval loan amount is 89%. Is that worth to take it? Thanks.

This post has been edited by kelvinlzy: Jan 28 2015, 02:01 PM

Just purely based on the rate without looking at the whole loan package I think that is fair.

Thanks Jasoncat, meanwhile I will wait for other banks' rates.

yeah, the + 0.56% is the spread. It can be in negatives too.. Like BLR - 2.4%

CxMB approved 90% of my loan of RM420k, with an interest of BR 4.00% + spread 0.50% = 4.50%. Compared with HxB which offered 89% of the loan amount, interest rate is (3.99% + 0.56% = 4.55%), is CxMB better a little bit? Please advise. Thanks.

1% LTV difference is equivalent to RM4.2k only. Based on the info given, I will opt for CxMB. However, are both offering the same loan terms in terms of lock in period, MRTA requirements, full-/semi-flexi, tenure etc? These should be factored in your decision making.

Sure CIMB better. Lower by 0.05%.

Long story short:

HxB: BR(3.99%) + Spread (0.56%) = 4.55%, semi flexi, lock in period 3 years, tenure 35 years, MRTA 100% for 20 years.

CxMB: BR(4%) + Spread (0.5%) = 4.50%, full flexi, lock in period 3 years, tenure 35 years, MRTA 100% for minimum 10 years.

Also, after lock in period should I refinance to other bank to save more interest? Thanks.

As for me, I will still choose CxMB as the interest lower @ 4.50% + full flexi.

After lock in period, unless there is a substantial cut in interest, otherwise it is not worth for you to consider refinance. Unless there is "ZERO" moving cost option.

Noted. Thanks a lot.

Seems CIMB is the winner...
Too early to judge whether it's worth to refinance after the lock in period lapse in 3 years time. You need to see what's the prevailing rate then and whether any cost incurred for the refinancing.

Quick update: PxB approved 90%, effective rate 4.4%, lock in period 3 years, MRTA 25 years, semi flexi. I assume it is better than CxMB?

This post has been edited by kelvinlzy: Jan 30 2015, 07:59 AM