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> Paying House Loan on Daily Basis (Financial)

rookiez
post Jun 11 2018, 12:53 PM, updated 6 months ago

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Hi All,

Just to check, I'm having a UOB Semi-Flexi loan and currently I'm doing monthly payment to the bank. Interest is basically calculated on daily-rest. I read in a forum saying that if we do weekly payment, we could finish up our payment 6 years earlier (if we take 35 years loan). Is that true? What if we do daily payment, can we save more on the interest? Do anyone has the excel sheet to share so that I can calculate how much of interest saving can be made for this?

Thanks.


taitianhin
post Jun 11 2018, 01:04 PM

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If the innterest is daily calculated, then yes, paying the same amount by daily is better than pay by monthly.
If pay by daily, the capital get changed on daily basis. Hence cheaper interest.

Having say that, most ppl will throw in installment payment whenever receive Paycheck. Instantly. And the Capital will be reduce immediately, by breaking this payment into daily payment will not benefit you.

Unless you have dailly paycheck, you may trigger daily payment
MeToo
post Jun 11 2018, 01:07 PM

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QUOTE(taitianhin @ Jun 11 2018, 01:04 PM)
If the innterest is daily calculated, then yes, paying the same amount by daily is better than pay by monthly.
If pay by daily, the capital get changed on daily basis. Hence cheaper interest.

Having say that, most ppl will throw in installment payment whenever receive Paycheck. Instantly. And the Capital will be reduce immediately, by breaking this payment into daily payment will not benefit you.

Unless you have dailly paycheck, you may trigger daily payment
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COrrect.

if its a flexible mortgage, jst dump extra $$ into reducing the principal, that works better then those daily payemnt..
chamelion
post Jun 11 2018, 01:07 PM

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This is due to effect of compound interest.
Whether debt or saving; the effect is very significant...
rookiez
post Jun 11 2018, 02:03 PM

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QUOTE(MeToo @ Jun 11 2018, 01:07 PM)
COrrect.

if its a flexible mortgage, jst dump extra $$ into reducing the principal, that works better then those daily payemnt..
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In this perspective, let say my monthly mortgage payment is RM3000, and if I decide to pay RM 100 per day. Will I be able to save on interest or it will be the same by paying RM 3000 before the due date. I believe I can save the interest right? Of course if I have extra $$ I can dump it in and this will be the redrawable amount.

Anyone has the amortization spreadsheet for daily basis interest calculation? That will be extremely helpful.

Thanks.


gugukrez
post Jun 11 2018, 02:15 PM

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QUOTE(rookiez @ Jun 11 2018, 02:03 PM)
In this perspective, let say my monthly mortgage payment is RM3000, and if I decide to pay RM 100 per day. Will I be able to save on interest or it will be the same by paying RM 3000 before the due date. I believe I can save the interest right? Of course if I have extra $$ I can dump it in and this will be the redrawable amount.

Anyone has the amortization spreadsheet for daily basis interest calculation? That will be extremely helpful.

Thanks.
*
For weekly mortgage payment.. yes it reduce interest and years.. but for daily.. need to consult mortgage consultant.. either there is this function or not..

but make sure there is no late payment.. As there is a time i set weekly.. My account insufficeint fund for 2 week.. thus is 2 time late payment.. in ccris/ctos will show two demerit instead of 1 demerit of the month..
remora
post Jun 11 2018, 02:22 PM

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QUOTE(rookiez @ Jun 11 2018, 02:03 PM)
In this perspective, let say my monthly mortgage payment is RM3000, and if I decide to pay RM 100 per day. Will I be able to save on interest or it will be the same by paying RM 3000 before the due date. I believe I can save the interest right? Of course if I have extra $$ I can dump it in and this will be the redrawable amount.

Anyone has the amortization spreadsheet for daily basis interest calculation? That will be extremely helpful.

Thanks.
*
There are indeed many mortgages in Malaysia with daily interest rest. However, please note that paying daily only saves you interest if you pay in advance - in your example, pay $100 everyday before due. But, this is not practical for common wage earner. For eg, assuming this it is either semi-flexi or flexi loan, why pay only $100 per day if you have extra income - just bank in whatever you could afford. Just dump your whole salary in a flexi loan and draw money as you need using the ATM/debit card.
taitianhin
post Jun 11 2018, 03:11 PM

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For example
Method 1
----------------
Pay at RM3100 on 1st Jan
has lesser interest than
Pay RM100 from 1st Jan to 31st Jan for 31 days

Method 2
----------------
Pay at RM3100 on 31st Jan
has more interest than
Pay RM100 from 1st Jan to 31st Jan for 31 days


Get it? Just a simple math

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