Hi, question regarding full-flexi vs semi-flexi. Please also tell me if my question doesn't make sense - I'm not super confident on my knowledge/the terms to use.

Say I plan to buy a property of 1 million loan amount total (so price is... about 1.1 million or so) for ease of calculation. Meaning the 1 million is 90% of the valuation.

Consider two situations:-
A - I apply loan for a lower percentage (let's say 500k).
B - I apply loan for the full 90% (meaning my loan amount 1 million) and then deposit 500k and leave it in the current account linked to the full flexi loan.

In both situations - would the amount I owe and interest I have to pay be more, the same, or less in A or B case? Or is this question missing some details meaning it cannot be reasonably answered?

I believe the 'cut-off' for rates is 500k, where properties below that are at a higher rate than properties above that? Is there another cut-off between 500k to 1 million? Is this the same between banks?


What's the quantum of these fees (I guess is percentage of total loaned amount, would it be closer to 0.5%/1% or substantially more? How does this interact with the (possible based on above post) lower rate for borrowing more?

No OPR change means no change in rate. I also shop around last month and got cheapest 3.85 Maybank. Did not try Alliance.

Yes it does, I think amount over 500k get slightly better rate (from what the loan officer told me, as I was considering taking less than 90%).

Agree on the dispute part. But 2 quota of 90% margin is only really relevant to those who gonna invest in property. With current pricing and rentals - the opportunity for that will likely be very dry for foreseeable future for most of us. Paying more than two mortgages.... jia lat wei.

Can I know what amount you apply for that can get 3.8%? So far best I can find is 3.85% (loaning for 90% of 8xxk property).

For context, I just signed offer letter for 820k. So I spent yesterday shopping around at the following banks (in chronological order):-

OCBC - 3.85% without MRTA/MLTA, 3.8% with MRTA/MLTA minimal amount. After further discussion with Loan Officer, the minimal amount is 15k.

Maybank - 3.85% with MRTA/MLTA (10k amount)

Public bank - 3.95% (can choose MRTA/MLTA or not) but they will request from HQ to bring down to 3.85% to match what other FI offering (this is direct quote from the lady who was advising me). In that case require MRTA/MLTA.

RHB - 3.9%, can try to push for 3.85%. Seems like required MRTA/MLTA but this wasn't confirmed.

Besides that through other contacts I spoke with the following banks:-

HLB - Directly said 3.85% can, with MRTA/MLTA minimal amount 10k

UOB - 3.85% with MRTA/MLTA

None of them have fixed mortgage (I asked), all are 'semi flexi' and discouraged me from full flexi since I'm wage earner. But the 'semi flexi' they described, based on my further questions, if you prepay a large amount more than your monthly instalment, interest will be counted against the total amount still owed. Which means... effectively same like full flexi (in terms of offset). What RHB/MBB agents explained to me was that full flexi has no charge to withdraw the amount, but has monthly current account charge. But semi-flexi has a charge (RM25, RM50, something like that depending on bank) to withdraw, no monthly current account charge.

After doing the above survey, I also tried to do so maths - assuming 738k loan amount (90% of 820k) and 30 year period (I'm not young), if I take the best offer above (OCBC 3.8% with 15k insurance) the total loaned amount would be 753k and the instalments would be 3510 a month. But if I take a 3.85% rate with no insurance, instalments would be 3460 a month. So purely on a cashflow basis 3.85% is 'better' (of course then its not insured in case something happen to me)?

Counting another way, even the 'minimal' insurance requested by the bank effectively 'costs' the same as a 0.1% increase in rate? So in order for it to be 'worth it' the MRTA/MLTA should bring the loan rate down by 1% (for parity).

Any other banks which may be able to beat the above offers? I've already submitted applications to four of the above.

If I take 738k loan with 3.85% rate - my repayment is RM3460 a month.

If I take 738k loan + 15k MRTA/MLTA (the minimum according to OCBC) and then 3.80% rate - my repayment is RM3510 a month.

Basically it seems that the MRTA/MLTA is 'worth' 0.1% rate increase (i.e. the monthly repayment for my loan with MRTA/MLTA is the same as it would be for a 3.9% loan without MRTA/MLTA).

And even though the MRTA/MLTA can be cancelled early (let's say in 5 years) which the agent mentioned, the amount was still borrowed and so I've still paid significant interest on that 15k amount within that 5 years.

Fair, i guess have to evaluate the value of that insurance to me. Maybe compare to similar term-life insurance externally.

This post has been edited by LostAndFound: Jun 29 2024, 01:10 PM

Reduced installment means principle has ALREADY been reduced due to advanced payment, doesn't it? Unless I'm misunderstanding. Just because your installment is 1.3k (for example) doesn't mean you can't continue to pay RM1.7k....

Depends on the FI, but I think you can always just call them up and request a change. What the system 'auto' do - no right or wrong. As long as the principle is deducted accordingly, whether the new reduced principle amount is stretched over the original tenure or shortened with same monthly, neither option can be considered better or worse.

I would actually prefer stretch tenure, personally, because once your principle goes relatively small the loan becomes like an emergency store of liquidity.

In my understanding, once got rejection from MBB/PBB this indicates something about applicant's risk profile which cause the rate to be higher. This is based on my understanding only, as a customer. Supply and demand, maybe not much possibility to nego.

I got 3.8% offers from OCBC and UOB currently, weighing them both. HLB told me 3.85 but now appealing. Maybank told me lowest is 3.85%.

All semi-flexi, I don't see the likelihood of doing withdrawal as-and-when to be very high. If needed then I don't mind doing a bit more work for it (phone calls etc) as well as paying the fees (25 or 50 ringgit depending on bank). Lower rate saves me money directly, and money in here is not my emergency fund also.

The one which is convenient for you to access (home branch). Since you're using Maybank already just stick with them.

Amount 738k. MRTA was really really low (one offered 2k, one offered 10k total, which means only covering a fraction of property value and short period because I explained I already have personal life insurance worth about equivalent to loaned amount).

UOB was the one who offered 3k MRTA for me.

Amount? Suspect you may get better deals elsewhere, 3.85% seems pretty common (500k above), I got 3.8% offers from two banks (see a bit earlier in this thread) myself.

Ah yes, amount of that quantum would definitely attract slightly higher rates. Suggest checking other banks too though, the 0.05 difference will add up over time.

Take 3.8%, don't think too much. The benefit is more than the value of free parking =)

For me maybank wouldn't even drop to 3.8% (UOB and OCBC offered me this), so... maybe different evaluations of my situation.

3.8 for refinancing of <500k amount? Sure bo?

This post has been edited by LostAndFound: Aug 17 2024, 09:52 PM