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?

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.

On the same note, should one buy a residential property after GST implemented, need to pay tax or exempted.

I attended a talk from some gst expert. What they said was just surface infor correct me if I am wrong. He mentioned that GST would depend very much if you are a registrant or not. If you are not a registrant the other person don't need to pay tax. But if A registrant deals with another registrant then it would be subjected to GST on the property pricing. It doesn't matter if it is a commercial or residential.

Will bank loan subject to GST?

Same question asked earlier and my answer is no difference either you take the BR-based or BLR-based loan for your scenario. Further explanation you may refer to the earlier post.

My apologies. Your scenario involves 2 banks which I have mistaken it as same bank with 2 offers (some applicant got the offer last year end, so is still BLR-based).

When the bank, be it Bank A or Bank B revises its BR, the BLR has to be adjusted by the same quantum.  You are worried Bank B will raise the BR/BLR and assume Bank A will keep its BR/BLR unchanged.  But the opposite can happen too, ie Bank A raises the BR/BLR but Bank B maintain the rate.  So, you basically have the same risk here as either Bank A or Bank B can also raise the rate.

Nevertheless, if both BR-based loan or BLR-based loan offers come from the same bank, then it is indifferent whichever offer you choose.

Hope the above clarify.

In your scenario,
Bank A: BLR-2.40% (BLR=6.85%)
Bank B: BR+1.25% (BR=3.20%)

Please note that,
- Both at present yield the same effective rate: 4.45%
- the spread, ie 2.40% (Bank A) or 1.25% (Bank B) needs to be maintained over the whole loan tenure.

If OPR increases by 0.25%,
- if both Bank A and Bank B increases the rate by same quantum in their respective BLR and BR, the effective lending rate will also be increased by 0.25% to 4.70%.
- if only Bank A increases the rate (by same quantum) and Bank B maintains its rate, effective lending rate will rise to 4.70% for loan obtained from Bank A whereas effective rate for Bank B's loan remain unchanged at 4.45%.
- if only Bank B increases the rate (by same quantum) and Bank A maintains its rate, effective lending rate will rise to 4.70% for loan obtained from Bank B whereas effective rate for Bank A's loan remain unchanged at 4.45%.

Is the picture clearer?

But pls do remember, since your scenario involves 2 diff banks, there is still risk there that the effective lending rate may differ in the future though there are the same now.  If both quotations come from the same bank, then no such issue.

Good luck