Hey guys, I am new in the market, and I'm curious on the housing loan.

I am getting a new condo around 600k, which I definitely need a house loan.

I have some doubt on the below,

1. Does the Size of the Bank matters? Like MayBank would be much secured as it's larger. Concerning that if merger would occurs, the loan rate may differ.

2. Why are Banks have different BR, but they all arrive at a similar loan rate? And which is more risky to consider, the Base Rate or the Margin Rate to arrive at the loan rate?

3. Is Islamic Loan a concerns? Btw, I'm non-muslim

4. Semi-Flexi or Full-flexi for a full-time employee?

why worry about bank size? small bank means they can run away? isnt that better since u no need to pay back anymore if they close shop

It's just my over worry.
Larger Bank usually give better impression that they are more secured, and the loan interest rate may not differ as much as possible?
And upon merger, the previous good loan rate may also subject to change.

I would think that bank won't close down, merely been bought over and the loan would be take over rather than we can run away with it

This post has been edited by yamasce: Oct 23 2015, 04:23 PM

Thanks a lot for the advise

Just wondering why some of the Banks have low BR and high margin, but some have high BR but low margin, where either arrive at the similar loan rate..

1. Professionally, I do not think it matters at all. There will be differences in your service though. Larger banks, as you are aware, have more branches across the country, but with cheap IBG (11 cents) and your salary being credited in a perticular bank account that you may have no choice of, does it really matter which bank you took your loans from?

2. BR is calculated by the banks' cost of funds. Money that banks lend you is actually borrowered from Bank Negara, and the banks themselves get charged by the BNM (called OPR), and the banks also have to pay their depositors dividends and returns. Due to these differences in costs, the each bank would have different cost of funds, which is reflected by the BR, which changes every 3 months.

Banks then would use this BR and add a spread, for their profit. Does it really matter to us which bank to choose from based on their BR? I cant say for sure. This BR thing has just started this year, and it has only been 3 quarters for each bank to change their BR, some did, others didn't

3. All my muslim clients take Islamic loans. It has all the pros and almost no cons, and the tenure, rate, MOF are all the same as the conventional loans:

a) No lock in period
b) Capping of interest rate (i.e 10%)


Answered above. In my professional opinion, what matters the most is that you are comfortable with the level of service the bank you are taking a loan from. Secondly, the effective interest rate of that particular bank. DOnt concern yourself with the BR as you have no control over them.

This post has been edited by wild_card_my: Oct 24 2015, 08:15 PM

take note on the locked in period, although now seems like relaxed the locked in period.

i got 1 property bought in 2009, locked in for 5 years.

i intend to dispose, but only found out locked in period is from the date of FULL drawdown, which is effectively from 2011.

You mean they tightened it up? I am not too aware of any lock-in period policies, since I encourage all my clients to do Islamic loans.

But thanks for sharing that useful warning.. not too aware that there may be changes. So you are saying that it used to be that the lock-in period starts from the date of execution... but now some banks changed it to the date of full drawdown (about the time you receive your keys)... is that it?

i mean now seem like relax this practise, many bank do not apply the lock in period.

in 2009 is very common.

locked in period is always base on full drawn, that is what banker said.

I see, yes you are right, that means the banks have relaxed on the rule then... i guess it could be due to the competition from the islamic financing which has no lock-in periods. WHy do you need a lock-in period anyway, you have already earned the interests in the first few years since the money was disbursed.. The lawyer fees for the loan agreement is also paid by the client... so why the lock-in periods?