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TSheavensea
post Mar 30 2017, 06:53 PM, updated 7y ago

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Deleted,
thanks to ZeonKid who enlightened me. smile.gif

This post has been edited by heavensea: Mar 31 2017, 12:41 AM
T231H
post Mar 30 2017, 07:09 PM

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during construction,...they have this progressive withdrawal to pay the developer upon the completion of construction stages during construction....this one got charge interest or not?
is this taken into consideration?
TSheavensea
post Mar 30 2017, 07:14 PM

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QUOTE(T231H @ Mar 30 2017, 07:09 PM)
during construction,...they have this progressive withdrawal to pay the developer upon the completion of construction stages during construction....this one got charge interest or not?
is this taken into consideration?
*
Already, it's very straightforward.

For instance HL@4.35%

Progressive housing loan amount=40000

You paid extra 2000, interest for next month beame 38000 x 4.35% / 12

Which means my above calculations should be correct, you paid 2000 and saved 4.35% of 2000...

In this case, I reckon semi flexi loan is overrated (stupid) except lumsum settlement...
T231H
post Mar 30 2017, 07:22 PM

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QUOTE(heavensea @ Mar 30 2017, 07:14 PM)
Already, it's very straightforward.

For instance HL@4.35%

Progressive housing loan amount=40000

You paid extra  2000, interest for next month beame 38000 x 4.35% / 12

Which means my above calculations should be correct, you paid 2000 and saved 4.35% of 2000...

In this case, I reckon semi flexi loan is overrated (stupid) except lumsum settlement...
*
hmm.gif
"you paid 2000 and saved 4.35% of 2000"
if you put into FD 2000 and saved FD rate (3.x%) of this 2000 ??
TSheavensea
post Mar 30 2017, 07:26 PM

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QUOTE(T231H @ Mar 30 2017, 07:22 PM)
hmm.gif
"you paid 2000 and saved 4.35% of 2000"
if you put into FD 2000 and saved FD rate (3.x%) of this 2000 ??
*
If alter FD rate to 3.5%:
Interest earned would reduced to RM7076.72

Still better than settle loan during construction period...

This post has been edited by heavensea: Mar 30 2017, 07:26 PM
T231H
post Mar 30 2017, 07:28 PM

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QUOTE(heavensea @ Mar 30 2017, 07:26 PM)
If alter FD rate to 3.5%:
Interest earned would reduced to RM7076.72

Still better than settle loan during construction period...
*
isn't it charged - gain = lost?
charged = interest rate charged
gain = interest rate earned

This post has been edited by T231H: Mar 30 2017, 08:04 PM
dasecret
post Mar 30 2017, 07:31 PM

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QUOTE(heavensea @ Mar 30 2017, 06:53 PM)
Assumption, construction period 4 years:
- Housing loan interest 4.35%
- FD rate 4.00%
- RM2000 as monthly payment for either savings / reduce loan

FD gain (compounding interest)
- Total deposits, RM2000 x 4 years = RM96000
- Matured amount = RM104123.29
- Profits gained = RM8123.29

Housing loan: (reduced loan during construction period)
- Total paid = RM96000
- Interest saved, RM2000 x 4.35% = RM87/month
- Total interest saved = 87 x 12 x 4 = RM4176

- Reinvested saved interest for 4 years (FD 4%)= RM353.36
- Total profits gained, 4176 + 353.36 = RM4529.36
In this case, why dump money into flexi loan account to reduce principal money in order to save interest? While the profits gained even lower than parking money into FD?
Please advise, thanks everyone..
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Ur calculation is off. Basically your assumption is dump in rm2k every month into either FD or home loan. But your calculation for home loan only consider one time rm2k principal repayment instead of the cumulative rm96k at the end of year 4

I didn't verify how u come up with the FD end balance so I just assume it's correct
TSheavensea
post Mar 30 2017, 07:42 PM

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QUOTE(dasecret @ Mar 30 2017, 07:31 PM)
Ur calculation is off. Basically your assumption is dump in rm2k every month into either FD or home loan. But your calculation for home loan only consider one time rm2k principal repayment instead of the cumulative rm96k at the end of year 4

I didn't verify how u come up with the FD end balance so I just assume it's correct
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Yes I'm talking abt the first 4 years of construction period only.
Which means "parking money" inside flexi home loan is not worth DURING CONSTRUCTION PERIOD, can be reinvested somewhere else (fd is a very simple comparison only) instead of wasted money muscle in so called flexi loan account...

Again, during construction period. During..

Those money reinvested somewhere else can be "park back" after VP. Wrong mah?
dasecret
post Mar 30 2017, 07:57 PM

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QUOTE(heavensea @ Mar 30 2017, 07:42 PM)
Yes I'm talking abt the first 4 years of construction period only.
Which means "parking money" inside flexi home loan is not worth DURING CONSTRUCTION PERIOD, can be reinvested somewhere else (fd is a very simple comparison only) instead of wasted money muscle in so called flexi loan account...

Again, during construction period. During..

Those money reinvested somewhere else can be "park back" after VP. Wrong mah?
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You are not addressing my comment. To get an accurate number, you need to plot it in excel and see it for yourself. Actually you should just put simpler assumption that you dump 100k into FD or home loan for 2 years. Mathematically it's impossible for the one with the lower interest rate to outperform the higher interest rate one. The concept of compounding interest applies to both. Only hire purchase loan quote you in simple interest format
TSheavensea
post Mar 30 2017, 08:08 PM

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QUOTE(dasecret @ Mar 30 2017, 07:57 PM)
You are not addressing my comment. To get an accurate number, you need to plot it in excel and see it for yourself. Actually you should just put simpler assumption that you dump 100k into FD or home loan for 2 years. Mathematically it's impossible for the one with the lower interest rate to outperform the higher interest rate one. The concept of compounding interest applies to both. Only hire purchase loan quote you in simple interest format
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This applied to vp, which means full loan disbursed but not progressively disbursed?

I also think like u did, but after I calculated.. it's shock that paying off housing loan during construction period is not worth sad.gif
MUM
post Mar 30 2017, 08:17 PM

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QUOTE(heavensea @ Mar 30 2017, 08:08 PM)
This applied to vp, which means full loan disbursed but not progressively disbursed?

I also think like u did, but after I calculated.. it's shock that paying off housing loan during construction period is not worth sad.gif
*
hmm.gif paying off loan faster, reduce interest charged, etc...not worth it?
unless the extra money will be used to earn more than the interest rate charged...

This post has been edited by MUM: Mar 30 2017, 08:48 PM
kradun
post Mar 30 2017, 09:08 PM

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QUOTE(heavensea @ Mar 30 2017, 06:53 PM)
Assumption, construction period 4 years:
- Housing loan interest 4.35%
- FD rate 4.00%
- RM2000 as monthly payment for either savings / reduce loan

FD gain (compounding interest)
- Total deposits, RM2000 x 4 years = RM96000
- Matured amount = RM104123.29
- Profits gained = RM8123.29

FD compounded interest on monthly basis  thumbup.gif

Housing loan: (reduced loan during construction period)
- Total paid = RM96000
- Interest saved, RM2000 x 4.35% = RM87/month
- Total interest saved = 87 x 12 x 4 = RM4176

House loan interest with breakpoint of 4 year basis? Which bank so kind? RM96,000 X 4.35% = RM4,176  brows.gif

- Reinvested saved interest for 4 years (FD 4%)= RM353.36
- Total profits gained, 4176 + 353.36 = RM4529.36
In this case, why dump money into flexi loan account to reduce principal money in order to save interest? While the profits gained even lower than parking money into FD?
Please advise, thanks everyone..
*
This post has been edited by kradun: Mar 30 2017, 09:10 PM
TSheavensea
post Mar 30 2017, 09:17 PM

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QUOTE(kradun @ Mar 30 2017, 09:08 PM)
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4 year basis is the construction period only mah,
4% compound merely assumption.

This post has been edited by heavensea: Mar 30 2017, 09:18 PM
kradun
post Mar 30 2017, 09:30 PM

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QUOTE(heavensea @ Mar 30 2017, 09:17 PM)
4 year basis is the construction period only mah,
4% compound merely assumption.
*
If you purely want to know the amount that u paid for house loan will end up how much, then u just need to apply the same method like how u get the fd result for fd profit will do.

Based on your computation for the house loan saving on interest, u assumed the bank will just charge u 1 time of interest based on 4.35%, while in fact bank charge that per month and interest will be calculate based on daily rest basis.

This post has been edited by kradun: Mar 30 2017, 09:35 PM
TSheavensea
post Mar 30 2017, 09:36 PM

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QUOTE(kradun @ Mar 30 2017, 09:30 PM)
If you purely want to know the amount that u paid for house loan will end up how much, then u just need to apply the same method like how u get the fd result for fd profit will do.

Based on your computation for the house loan saving on interest, u assumed the bank will just charge u 1 time of interest based on 4.35%, while in fact bank charge that per month and interest calculate will be calculate based on daily rest basis.
*
because it's not yet vp, still on progressive interest.

so the interest is only charged on "balance of total loan amount" that they already disbursed.
thanks, I will redo the calculations again.

This post has been edited by heavensea: Mar 30 2017, 09:37 PM
T231H
post Mar 31 2017, 09:19 AM

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QUOTE(heavensea @ Mar 30 2017, 07:14 PM)
Already, it's very straightforward.

For instance HL@4.35%

Progressive housing loan amount=40000

You paid extra  2000, interest for next month beame 38000 x 4.35% / 12

Which means my above calculations should be correct, you paid 2000 and saved 4.35% of 2000...

In this case, I reckon semi flexi loan is overrated (stupid) except lumsum settlement...
*
hmm.gif so after you had been enlightened and managed to solve it....
does this statement about "stupid" still stand?
because I believes there are many readers subscribe to this housing loan plan...... notworthy.gif
TSheavensea
post Mar 31 2017, 02:47 PM

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QUOTE(T231H @ Mar 31 2017, 09:19 AM)
hmm.gif so after you had been enlightened and managed to solve it....
does this statement about "stupid" still stand?
because I believes there are many readers subscribe to this housing loan plan......  notworthy.gif
*
Last night I also find out by myself liao via excel as suggested by you. (I'm so noob haha)

should be calculated as:
2000x 4.35/100/12= 7.25
4000x 4.35/100/12=7.25 + 7.25
6000x 4.35/100/12=7.25 + 7.25 + 7.25
and sooooooo on

Until 48 months.

Thanks to zeonkid again, please refer to excel that he show me.
Attached Image

In conclusion, "paying more" into construction period is definitely "save more" than put the money inside FD (assume 4% p.a.)
and we can enjoyed lower commitment after vp. 2k x 12 x 4 = nearly reduced by 100k smile.gif

However for those who confidence enough to use those money for returns around 6% p.a. like ASB, maybe they will think it differently.

This post has been edited by heavensea: Mar 31 2017, 02:48 PM
wingless
post Apr 13 2017, 11:40 AM

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QUOTE(heavensea @ Mar 31 2017, 02:47 PM)
Last night I also find out by myself liao via excel as suggested by you. (I'm so noob haha)

should be calculated as:
2000x 4.35/100/12= 7.25
4000x 4.35/100/12=7.25 + 7.25
6000x 4.35/100/12=7.25 + 7.25 + 7.25
and sooooooo on

Until 48 months.

Thanks to zeonkid again, please refer to excel that he show me.
Attached Image

In conclusion, "paying more" into construction period is definitely "save more" than put the money inside FD (assume 4% p.a.)
and we can enjoyed lower commitment after vp. 2k x 12 x 4 = nearly reduced by 100k smile.gif

However for those who confidence enough to use those money for returns around 6% p.a. like ASB, maybe they will think it differently.
*
Hi Heavensea,

inspired! thumbup.gif can i have the excel template? Please notworthy.gif
thanks!
TSheavensea
post Apr 13 2017, 03:38 PM

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QUOTE(wingless @ Apr 13 2017, 11:40 AM)
Hi Heavensea,

inspired! thumbup.gif  can i have the excel template?  Please notworthy.gif
thanks!
*
zeonkid it was kindly provided by this forumer. smile.gif

https://forum.lowyat.net/index.php?showtopic=4243040&hl=

This post has been edited by heavensea: Apr 13 2017, 03:41 PM
wingless
post Apr 13 2017, 04:37 PM

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QUOTE(heavensea @ Apr 13 2017, 03:38 PM)
zeonkid it was kindly provided by this forumer. smile.gif

https://forum.lowyat.net/index.php?showtopic=4243040&hl=
*
Thanks. The spreadsheet is clearer in this link. thumbsup.gif

 

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