Most likely the GST. As for the changes from BLR to BR, no one really knows the rate yet, most likely it will be similar to what we are getting now anyway.

Well.. when GST in implemented, surely there will be inflation!

However, the economy going down or not, I cannot speculate. It may seem like the case and people would like to hedge their investments by buying gold and other precious metals, or bond unit trusts funds. When the rental market is down, you may find it difficult to hold onto your properties too. So they may think it would be better to let it go and wait until the storm passes.

Rental for commercial properties can go down during an economic recession. If there are mass layoffs, the residential rental market can be affected too. If they have no jobs, how can they pay? As some move back to their hometown, there will be less prospects to rent out to, or some will delay the payments. Im not saying it will happen, but it can happen. I dont like to speculate on the economies, but if it is true that people are dumping their assets to hedge on other assets.. then maybe it's important to take note.

Anyway, we are way off topic here...

This post has been edited by wild_card_my: Dec 17 2014, 12:46 PM

Thanks for sharing. No news form my side of banks yet.


But I dont quite get what you said, it means for the same loan amount you need to pay RM140/month more when we start using BR? That's... not very nice :|

Noted, thanks for sharing. That is quite significant. So the effective interest rates have gone up for that particular bank.

I will post whatever i have whenever I have somehting.

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?

This post has been edited by wild_card_my: Dec 31 2014, 10:35 AM

You dont know that. Do you know what their effective rates they are offering?

Also, the BR is the average borrowing cost for the banks... if anything, isn't Maybank's borrowing cost very low? Which is good for them.

Wait, have they announced that their rates will be BR + 1%? where did you get this? Their spread should be independent from other banks, just like how it is now.

This post has been edited by wild_card_my: Dec 31 2014, 10:13 AM

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.

This post has been edited by wild_card_my: Dec 31 2014, 10:38 AM

Yes, as such, maybank may have lower BR, but their effective interest rates may be similar to other banks anyway due to the differences of each spread given to the client

To be honest, I dont know myself what it is going to be, but I expect nothing will change much except the old loans would be based on the BLR, while the newer ones will be based on BR. EIR would be similar

This post has been edited by wild_card_my: Dec 31 2014, 10:42 AM

BLR + 2.45% is horrible...

Go for BR.

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.

Ill be honest that I too, am not too clear about this. But given the nature of BR being more "transparent" and probably would change more in a shorter time compared to BLR, the customers stands to "lose" in the form of uncertain and constantly changing interest rates. BLR can actually be individually set by each bank differently, only that most banks decided that they would set it at the same levels of 6.85% but there were some banks who set it a little high (but with better spread)

I doubt that the changes in BR would change so drastically from one quarter to another. But in the end of the day... customers will now have to be keep track of each bank's BR for each loan that they have (unless they keep on signing with the same banks) while they used to only have to keep up with one single BLR. Very inconvenient, but Zeti must have her reasons.

This post has been edited by wild_card_my: Dec 31 2014, 11:48 AM

Maybe, maybe not. OCBC's effective interest rates for their reported BR so far is much higher than BLR. But that number i got isnt official. Also, BR is expected to change more often than the BLR, since BR is based on the average borrowing costs for each bank which changes often, while the BLR is based on the OPR set by the BNM that has not been changing too ofter (last change was in June, before that it was quite a few years apart)

Effective interest rates is all that matter. If they are similar, and you need to buy a house.. i dont think it matters.

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.

Jason, if you dont mind me asking ya.. you seem to know the intricacies of how the bank works. Do you work for the bank or any financial institutions on the corporate levels?

In this situation, when a BANK A adjusts its BR up by 20 basis points, does that mean their BLR will also be adjusted by 20 basis points?

If yes, does this also mean that in the near future, the BLR rates will not be uniform between one bank and another? BANK A, due to increasing its BR by 20 basis points, also has to increase its BLR by 20 basis poinst, as such its BLR is now 7.05%; while BANK B which has not increased its BR, still has the BLR of 6.85%

I understand that the BLR can move independently between one bank to another (AL Rajhi's BLR was higher than the competition back then), but it has been uniform for most major banks in Malaysia (Starting from the top: MBB, CIMB, PBB,~~~ all at 6.6% and now 6.85%)

Is this situation possible? Sorry if I am asking the same questions that was covered earlier, I just got back and everything moving so fast.

This post has been edited by wild_card_my: Jan 17 2015, 08:27 AM

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