Sorry, it should be BLR - 2.45%

Yes, BLR - 2.45% is actually quite good. That gives you about 4.4% Effective interest rate, which is what you will probably get with BR rates, as reported in some posts above.

Thanks for the tip

They say that the BR can change every 3 months.

Overnight-policy-rate  (OPR) is set by the BNM, which is the interest rates charged by the BNM for the loans that they extend to the commercial banks. In turn, the banks would loan out the money to the public in the form of mortgage/pl/hl/asbloan/etc. based on the BLR. As such, when OPR changes, BLR changes too. But BLR has the "advantage(??)" of relying on a single metric which is the OPR as the basis to set its own interest rates. And since OPR doesn't change that ofter, BLR stays the same way too.

BR on the other hand, is the average borrowing cost for the banks, and these are based on a matrix of loans available to the banks. Different banks would have different abilities/capacity to borrow, as well as interest rates charged to them. As such, chances are the BR will be more... what's the word... variable (?)... have higher entropy (??) than BLR since BR is based on the average borrowing costs which changes on a daily basis for the bank. Remember, banks borrow from each other too, and from their depositors too, and these things have costs associated to them in the form of payable interests.

As such, BR is similar to KLIBOR but not exactly the same. I expect the BR would change (up/down) every quarter as they are allowed to.

But at the end, would it put consumers in a disadvantaged position? Since its bases on BR + Spread.
Let's take two examples, Maybank and RHB Bank.
Based on screen shot recently released, Maybank has BR=3.2 and RHB has BR=4.0. Say if Maybank charges spread of 1.2 = effective rate 4.4; whereby RHB charges spread of 0.4 = effective rate 4.4.

On paper both have the same effective rates, however, let's say on next quarter, Maybank's BR is increased to 4.0 due to certain circumstances, and RHB's also increased to 4.1. Wouldn't this put Maybank borrowers in a disadvantaged position, having to pay effective rate of 5.2 now as compared to 4.5 from RHB? since the spread is now tied to BR.

Correct me if I understood it wrongly.

they only changed the mechanism...the final rate will be the same

maybe BNM want this,

when ppl see rate - x% => wah so nice!? BBB!

when ppl see rate + % => think think first... tell u later.

Thanks for your advice.
In other words, no need to worry, right?

If I were you, I would take the BLR. it hasn't changed too much over the years, while the BR is "expected" to change on a quarterly cycle. This would throw a havoc on your personal financial management.

But according to BNM, after BR introduced, BLR will change as frequent as BR too.

[i][/i]

But according to BNM, after BR introduced, BLR will change as frequent as BR too.

[i][/i]

Sorry,u have the source from BNM confirming your statement?just want reassurance

As some of us predicted, the effective rate is similar to what we are getting now.

Asgaard, what is the source for all these numbers ya? BNM?

edit: how to summon?

The banks are required to submit to BNM their proposed BR and the effective lending rate (ie BR+spread) by 26/12.  The effective lending rate is based on the scenario of RM350k loan for 30 years without lock-in period for the best profile customer.  BNM has then sent to the banks the list of FI, Islamic FI and Development FI with their proposed BR and effective lending rate.

Thanks for the tip

They say that the BR can change every 3 months.

Overnight-policy-rate  (OPR) is set by the BNM, which is the interest rates charged by the BNM for the loans that they extend to the commercial banks. In turn, the banks would loan out the money to the public in the form of mortgage/pl/hl/asbloan/etc. based on the BLR. As such, when OPR changes, BLR changes too. But BLR has the "advantage(??)" of relying on a single metric which is the OPR as the basis to set its own interest rates. And since OPR doesn't change that ofter, BLR stays the same way too.

BR on the other hand, is the average borrowing cost for the banks, and these are based on a matrix of loans available to the banks. Different banks would have different abilities/capacity to borrow, as well as interest rates charged to them. As such, chances are the BR will be more... what's the word... variable (?)... have higher entropy (??) than BLR since BR is based on the average borrowing costs which changes on a daily basis for the bank. Remember, banks borrow from each other too, and from their depositors too, and these things have costs associated to them in the form of payable interests.

As such, BR is similar to KLIBOR but not exactly the same. I expect the BR would change (up/down) every quarter as they are allowed to.

if i look at my current loan interest rate. It is 4.35%
Then I look at the submitted rate, it is obvious all banks are higher.

Means with this BR, it is higher cost for consumers!

Bro, I believe your loan is much higher than RM350k (the loan amount that is used as the basis for determining the effective lending rate for illustrative purpose).  As such, the all-in pricing could be more attractive and near to your current BLR-based rate.

Out of topic question,

If I sell my residential property after GST is implemented, will I kena GST tax?
Thanks.