Nope, he paid more, about rm80-90k in actual.
So before you decide to do refinance, you need to know total interest paid for the new loan. Then must add together the total interest paid on the first loan together with the legal fees you need to fork out.
By ignoring the interest paid on first loan, for sure you see "savings" on the second loan.
And another myth to be busted again, if your loan amount are <rm200k, you may only get BLR-2%, not 2.4%, so 6.85-2=4.85.
5% sure can't be used for current, but for the past 10 years, the average interest was 5.25%(sure I can't use this average to do calculation but so do the so-called pro also by using 5.85%), but this is a reference to do calculations.
Financial institutions workers like to play with figures just to secure a business. We must be good on this.

I've presented my numbers, the other guy has not done the same. Probably because he is afraid that his lack of knowledge in this matter would mean that his numbers are wrong in the first place.

Anyway, the simplest way to think about this is that: going forward 240 months from today, would you prefer to pay:-

(don't refinance) Scenario A: RM1,179.88x240month = RM283,171.20

(refinance) Scenario B: RM1,086.10x240month = RM260,664 in total

Listen to the other guy if you want the bank to earn RM22k++ in the next few years. I am not asking everyone to start refinancing their mortgages, everyone has their reasons when deciding on a financial maneuver. But when the numbers have been presented, and peer-reviewed for all to see, and the other guy still insist that he is right, then there must be something loose in his head.

I am betting that he is so red-faced by now and couldn't stand down to admit that he was wrong. But whatever it is, this is the true face of supersound, I'm glad we had this exchange, it has exposed him for what he is.

This post has been edited by wild_card_my: Dec 14 2014, 02:31 PM

Exactly. TS' never asked the pro and con of refinancing. He have decided to refinance. He is just asking the forum which bank gives the best deal. Maybe he needs to refinance to get more money, and he could use the extra money to make very good returns from it ? Or he could use the money to buy a car without taking expensive HP loan ? We never know...

But the discussion has gone off track because of 1 person's lack of knowledge in financing

Well, guys, I am still here partly for work.

So to the TS and anyone else, if you still need to refinance, I can help with applications to 5 banks, all under our firm's panel. I can be contacted from the number posted in my signature below.

For the rest who still wonder about the numbers in refinancing or morgage as a whole, you can post your questions in this lovely thread here, as per allowed by our very own STAFF-MOD, Lucifah.

Have a good day people.

Whether refinancing is worth or not, just calculated the interest needs to paid from now to end of old loan tenure vs new refinancing loan interest from start to end, as simple as that.

Whether the past already paid 1% or 10% or 100% is not related at all and irrelevant anymore to justify the refinancing.
You only concern from now to end.

Eg.
Old 25 years loan 300k, after servicing 5 years, left 250K outstanding, whether you have paid how much the interest over the 5 years is never in the calculation to justify refinancing.

you only concern how much need to pay from now to rest 20 years on old loan
vs
a new refinancing loan of 20 years of 250K

Yea... TS also never ask pros and cons.

Different customer, different needs, dun jump the trigger and blast tin kosong comment, betul anot showtime?



This post has been edited by Bonescythe: Dec 14 2014, 04:43 PM

Thanks for the calculation comparison. This has clearly makes me understand more about load financing.

Do you have calculation to show?
If I'm not mistaken, what you are trying to tell me is that refinancing is BAD choice when;
1) If I increase the tenure, i.e. my case, which supposed to be finished by 2035, but I increased it to 2045. Hence, I need to pay additional 10 years interest, so the "sunken" interest that I paid need to be taken into consideration.
2) If the current LO are not better than my existing one.

--------------------------------------
Was busy over the weekend, didn't expect this matter will escalated...

Conclusion, wild_card_my is correct in between the comparison between the old LO and new. supersound may also be right if what he's trying to tell me are as I explained. Thank you all for helping me understand.

Just to update my situation,
I'd contacted my banker, apparently my LO is BLR+0.15% after 2007 (only the first 2 years are BLR-1%). It is definitely worth to do refinance in this case. HOWEVER, I have advance payment of 9 months in the system, due to I paid more than the minimum throughout the years and sometimes bonus. So, I got introduced a plan call "Capital Repayment", and can be paid using EPF account 2. After ding dong calculation and read through this thread, I can shorten my tenure to 3 years only!!

2. Withdrawal to reduce / redeem a housing loan
This scheme allows individuals to withdraw money from their EPF Account 2 to reduce or redeem the housing loan balance with approved financial institutions. This can be done for individual purchases, joint purchases, or for a spouses’ housing loan.

To apply, the latest Housing Loan Balance Statement (no more than 3 months from date of application) and all Loan Redemption Letters (where refinancing was performed before) must be submitted at the time of the application. You can walk in to any KWSP office to submit the KWSP 9C (AHL) (D8) Withdrawal Form , along with the supporting documents or submit via postal services.

Withdrawal limits
The entire housing loan balance
Any withdrawal amount is always subject to whatever money is available in the applicant’s (and where applicable, joint applicant’s) Account 2.

In other words, I will not refinance at the moment (even though my LO rate is super high), but I will use the refinancing when the next right investment comes into my sight.

You have to do yours based on your requirement, mine are just a guide. Not to mention with loan amount < rm200k, you may not able to get BLR-2.4%. This you need to visit the bank and ask for it. With the highest of -2.4% and you still settle it within 2035, you only get rm10000 of savings.
For the time being, you may consider reduce the principle first which is a better option. This at the end you will get rm10000 of savings once you complete the loan.
This is for you to take next property's loan. And if your second property are under construction type, you get discount on legal fees. No point of refinance your current loan to buy new house.

Thank you for the vote of confidence. My calculations and arguments have also been vouched by other verteran forummers in both FINANCE, BUSINES and INVESTMENT HOUSE subforum as well as PROPERTY TALK subforum.

In any case, if you are interested to refinance, I would like to put forward my services to you. As a mortgage broker, my job is... to secure my clients the mortgage that they need. My services are free, I earn my pay from the banks. Thanks

Thank you. I will take note. I might need your service next year...

Hi,

I have a question about refinancing.

So far I have heard few scenarios and I do not know which one is true.

I will use below initials for ez reference:-
Refinance Amount = RA
Outstanding Loan Balance = OS
(90% of RA) - OS = CO (cash out)

My understanding:-
For DSR calculation is Inst for CO@10yrs + Inst for OS@35yrs.
For repayment is RA@35yrs

Scenario 1:-
For DSR calculation is Inst for CO@10yrs + Inst for OS@35yrs.
For repayment amount is follow above calculation.

Scenario 2:-
DSR and repayment is RA at 10yrs.

Please advise which is true.

Thank You.

Regards,
Bill

Neither.

DSR calculation is Inst for CO@10 yrs
Repayment is RA@35 yrs

Thanks!!

But why would banks not consider the installment of the outstanding loan when calculating DSR?

They do unless I got your message wrong.

Guys: I've a question on refinance. Instead of opening a new thread, I thought I should ask it in an existing thread. Below is my situation.

My first property is completed/loan free. My first time withdrawal from KWSP is for this first property. Since my loan is completed, I can't withdraw from KWSP. But my intention is to keep withdrawing from KWSP. The reason is because KWSP did not allow withdrawal for the 2nd/3rd/subsequent property if the first property has not been sold. Anyone can help out on this?