because
http://www.rhbbank.com.my/personal/loans/asb_financing.shtm
blr = 6.75
blr - 1.25 = 5.5
if you do 7.05 vs 7.0. of course 7.05 is more.
borrow RM xxx at 7.05% to put in ASB at 7%
that's crazy
borrow RM xx at 5.5% to put in ASB at 7%
that is smart

btw, your calculations are wrong

If you use your own saving, for 5 years with RM226 per month = 2,712 p.a
1st year: 2,712 + 0.07x2,712 = 2,902
wrong calculation
at 7%
its (RM226 * 1/12 * 0.07) + (RM226 * 2/12 * 0.07) + ... (RM226 * 12/12 * 0.07)
dividend is on a monthly basis. based on lowest amount for that month.
dividend for borrowing and putting 10k in august vs
dividend for putting 2k in august, 2k in september, 2k in october, 2k in november, 2k in december
10k in august will get more dividend

correct me if i'm wrong.

---

Added on November 19, 2008, 9:07 pm

i'm with you
the link died
i did some digging
and i found an archive
http://web.archive.org/web/20070916041544/...om/asbloan.html

(a) the author did not take into account COMPOUND INTEREST
the author said something like this
put in 100k in asb
every year 7%
every year get 7k
which is wrong

(b) at that time the rate was "BLR + 0.5% (iaitu 6.9% setahun) "
6.9%
6.9% loan vs 7.0% return
tough fight.
but now the rate is
http://www.rhbbank.com.my/personal/loans/asb_financing.shtm
BLR - 1.25
6.75 - 1.25
5.5%

5.5% vs 7.0% return

anyways

i use this to calculate repayment
http://www.bankofinternet.com/amortization-calculator.aspx

my calculations also say that,
if you roll the money

year asb                  div            div used to pay loan
1 100,000.00 7,000.00 0.00
2 107,000.00 7,490.00 0.00
3 114,490.00 8,014.30 0.00
4 122,504.30 8,575.30 8,254.68
5 122,824.92 8,597.74 8,254.68
6 123,167.99 8,621.76 8,254.68
7 123,535.06 8,647.45 8,254.68
8 123,927.84 8,674.95 8,254.68
9 124,348.11 8,704.37 8,254.68
10 124,797.80 8,735.85 8,254.68
11 125,278.96 8,769.53 8,254.68
12 125,793.81 8,805.57 8,254.68
13 126,344.69 8,844.13 8,254.68
14 126,934.14 8,885.39 8,254.68
15 127,564.85 8,929.54 8,254.68
16 128,239.71 8,976.78 8,254.68
17 128,961.81 9,027.33 8,254.68
18 129,734.46 9,081.41 8,254.68
19 130,561.19 9,139.28 8,254.68
20 131,445.80 9,201.21 8,254.68

after 20 years, you get 131k
you pay 8,254.68 for 3 years

if you use your own cash
ASB PUT AFTER PUT DIV
1 0.00 8,254.68 8,254.68 577.83
2 8,832.51 8,254.68 17,087.19 1,196.10
3 18,283.29 8,254.68 26,537.97 1,857.66
4 28,395.63 0.00 28,395.63 1,987.69
5 30,383.32 0.00 30,383.32 2,126.83
6 32,510.16 0.00 32,510.16 2,275.71
7 34,785.87 0.00 34,785.87 2,435.01
8 37,220.88 0.00 37,220.88 2,605.46
9 39,826.34 0.00 39,826.34 2,787.84
10 42,614.18 0.00 42,614.18 2,982.99
11 45,597.17 0.00 45,597.17 3,191.80
12 48,788.98 0.00 48,788.98 3,415.23
13 52,204.21 0.00 52,204.21 3,654.29
14 55,858.50 0.00 55,858.50 3,910.09
15 59,768.59 0.00 59,768.59 4,183.80
16 63,952.40 0.00 63,952.40 4,476.67
17 68,429.06 0.00 68,429.06 4,790.03
18 73,219.10 0.00 73,219.10 5,125.34
19 78,344.44 0.00 78,344.44 5,484.11
20 83,828.55 0.00 83,828.55 5,868.00

this is at the compound interest of 7%
actual div is less  for year 1,2,3 coz dividend is monthly balance
this is assuming that if the blr increases, the asb rates increases as well.
anybody got statistics on blr vs asb rates?