That clears up my confusion!! Basically BR/BLR will be changed whenever there's a change in OPR, as bank "needs" to maintain their profit at the same ratio. So either taking up BLR-2.4 (blr=6.85) or BR+1.2 (br=3.2) will expose myself to the same risk as everything is "at the bank's mercy", just different terms on the paper.

Thanks so much for your explanation.   

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.

dear all help me to analyze as well i got 2 offer (refinancing)

Bank A: BLR-2.47% (4.38%) (have to pay all the cost)
Bank B: BR+0.85% (4.55%) zero moving cost (only need to pay the stamp duty)

the difference is full cost is 3 x ZMC

which one is better if this is just for cash out for investment purpose if any

thank you

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.