BLR and BR has vast differences. Currently effective rate between both may look small or none because the BR reference rate is revised in quarterly basis (at this point). The fact is, ref rate moves in tandem with KLIBOR and Interbank rate in daily basis but to minimize market shock, BNM has limited the volatility to quarterly basis.

For instance, the avg inter-bank rate from 8/1/15 - 9/1/15 was around 3.85% compare to normal 3.3% (due to weak RM amid of selling pressure from RM). Though the Ref rate is not entirely tied only with KLIBOR/Inter-bank (other factors i.e individual bank deposit/loan ratio also count), but the trend is tied closely with how the KLIBOR/Inter-bank goes. Which means in other words, if Ref rate is in daily basis, the effective lending rate for 8/1/15 till 9/1/15 will rise by slightly above 50 basis point to about 5.2%.

There is a valid reason why BNM want to implement BR instead of BLR. The disadvantages of BLR is, it fails to reflect the true cost of lending versus each individual banks' strengths. Unless BLR is revised regularly, it has quietly moving away from the market trends and could pose serious problems if certain bank over lend without enough coverage (with enough deposit for example). The over-extended financiers will have little bullet to cover during a crisis. For instance as what is happening now, we have non-stop outflow of foreigner funds and depreciation of currency, not to mention how long the rout in oil will end which will definitely put a salt to injury to our already weak economy that Malaysia (both private and public) is quite dependent on.

In short, in laymen term, under the new BR framework:

We will enjoy lower effective mortgage rate when the market is full of funds as during the 2009 - mid 2013 when Malaysia is the favorite destination (the 2nd most popular in Asia) for foreigner funds to park their monies particularly in our bonds markets (both public and private), and stock market to a lesser extend.

Or we will pay higher rate (easily over 5%) during credit squeeze period when event like our bonds market facing selling pressure as what is taking place currently happens. Other factors: lower deposit (people save less either bcoz have better opportunity to invest or needs require to spend amid inflation or currency depreciation), outflow of fund from stock market, etc. The variables is quite large.

All the best and good luck to over gearing borrowers. You really need to prepare for the days of extra interests payment due to the rise of rate. The trigger factors for higher borrowing cost are almost ready in place now.