The extra payment you've made is used to reduce the principle thus you're paying lesser interest. However your installment amount per month remains the same.

E.g installment is 2000 per month, 400 paid to principle and 1600 goes to interest, by putting extra every month or one time advance payment, it would make the payment to maybe 800 on principle and 1200 on interest. This effectively reduces your loan tenure e.g you took a loan for 35 years but doing now it's reduced to 30 years, but will not reduce your monthly installment that you pay to the bank.

Hope this is clear enough.

Dear WahBiang,

Extra payment

1. When you pay extra for monthly installment, which it will reduce your total interest charges.

Example:

2016:
Housing loan Rm500,000 / 4.5% interest rate / 35 years loan tenure
Monthly installment is RM2,366 (Rm1,875 Interest + Rm491.28 Principal = Rm2,366)

As you can see, your installment payment are actually paying more towards your interest than your principal.
If you decided to start paying extra RM500 every month. Your Monthly payment will be RM2,866 (RM1,875 Interest +RM991.28 Principal = RM2,866)

You will be paying more towards your Principal with the extra RM500. Hence, if you continue paying extra RM500/month consistently.

Your total interest saved would be RM180,759
Your Loan tenure will be shorten by 136months.

-This will help reduce your interest charges and reduce the loan tenure.

Paying extra to Capital account/advanced account

2. If you have a sudden influx of cash into your pocket, lets say inheritance of RM100,000, and you decided to put it into your housing loan capital account/advanced account, because you have max out ASB and other financial options.

Example:

2016
- Housing loan Rm500,000 / 4.5% interest rate / 35 years loan tenure
Monthly installment is RM2,366 (Rm1,875 Interest + Rm491.28 Principal = Rm2,366)
Total interest charge: RM493,837.28

- If you credit in Rm100,000 into the account, housing loan outstanding would be RM400,000 (RM500,000 -RM100,000), and paying the same installment amount, this will reduce your total interest charge to Rm395,072.

Because the interest you are paying right now is 4.5% on Rm400,000 instead 4.5% on Rm500,000.

Hence, you save interest and reduce the loan tenure likewise.
Do note* Your installment will never alter, your minimum installment payment will forever be the same RM2,366 for the rest of the mortgage tenure. It will never be reduced*
3. After completion, you start paying the installment as normal. Before construction, you are just paying for the interest only, won't reduce your capital.

is it advisable/make sense to buy mortgage insurance for say 15-20 years for loan tenure of 35 years? is that allow? and what are the pro /cons ?

my banker only quote me 15-20 years for 35 years loan.
MRTA for rm443,700, premium will be :
15 yrs rm7,983
20yrs rm12,602

OLTA for rm443,700, premium will be :
15yrs rm14,798
20yrs rm23,268

Thanks Evan.

Yeah, that's what I thought as well. With the same installment coupled with some advanced payment, the interest payable should be lesser. Thought it can help to reduce the monthly installment (keeping same loan term), but reducing the loan tenure seems okay as well (shorter loan term).

some questions about loan application.

to support my application, where can i get the statement for ASW2020/ASM? will it help?

been going to banks, most need time to print/fee to print savings account statements.

Even Public Mutual will send physical statement via snail mail (p/s: no online account yet).

ASW2020/ASM I think you have to print with their online account. if not, have to request them to print for you. It will help as the dividend can be counted as income.

thanks.

i cant seem to find the online account registration for ASW2020/ASM 

any idea where?

I also don't have such account leh ... maybe can try here ? http://www.asnb.com.my/v3_/asnbv2_6contact.php#pejabatasnb

Just want to ask, how important is PTPTN in the loan approval?

dont think there's such online service.

most likely need to visit branch to get the printout.
*update: called PNB. need to visit the Jalan Tun Razak office to get statement (balance, invested since when, etc). Can get statement on the same day. If other branches, may not be same day (didnt ask how long).

Just want to ask, how important is PTPTN in the loan approval?

Ptptn is so important.. My housing loan has just rejected by bsn coz of ptptn... 

very important as it's part of CCRIS, if you dun pay off ur late arrear, your loan will not pass.

OMG! I just went to print my ccris, it's there!
The officer told me just updated 29/02!
Darn!

Will there be leniency? Depends on bank judgment?
Or straight denied when they see unpaid PTPTN?

dont think there's such online service.

most likely need to visit branch to get the printout.
*update: called PNB. need to visit the Jalan Tun Razak office to get statement (balance, invested since when, etc). Can get statement on the same day. If other branches, may not be same day (didnt ask how long).

Would you like me to look into your loan case to see if I can help you to get approval.

You can go to PTPTN to restructure ur loan and it will disappear from CCRIS after that. It will update on 10/4 that your PTPTN CCRIS had been removed.

There is no leniency ...

I have submitted my loan under AIA for a customer in here for 200k and the client had 14 months arrear for ptptn, loan approved