Just today my house loan appeared in my Maybank2u account.

Outstanding Balance - 300k++ (from 500k++ since this is the amount released by the developer based on their current progress)
Outstanding GPP - RM0.00
Payment Due Date - N/A
Monthly Instalment - RM2100++
Instalment Due - RM0.00
Payment in Advance - RM0.00

The apartment should complete early Q4 2019


But when I calculate, I should be paying less than RM1.5k but why RM2100+?

Is it that I should wait longer so it'll update to RM1.5k?

Need some enlightenment here.

Couldn't understand how this progressive interest works

show your calculation here. where you get the RM1.5k?
loan is appear in 3 type as conventional, semi-flexi and fully flexi.

Get your offer letter and go to banker and ask better. Or bank faster

I used this as a reference. And then create my own spreadsheet using the formula and added the percentage of the progress

https://mypf.my/2016/11/02/malaysia-propert...yment-schedule/

I may be wrong but rm2100 mthly instalment o ly kick off when ur prop vp

GPP stands for what? Maybe thats the progressive interest due?

When was the disbursement from bank and when is the due date. Could be more than 30 days.

Click on transaction history and see how much the amount deducted. Assuming you signed standing instruction for bank to auto deduct from your saving account monthly.

Yes correct. Thats why Im confused why do I need to pay this amount when in the letter, the construction is still in progress (not yet completed).

I also dont understand the GPP stuff

This post has been edited by Leo the Lion: Jan 24 2019, 04:43 PM

Disbursement started today.


Nothing deducted yet...

new loan?
2.1k most likely is the amount after all amount dispensed to developer.

may be you can check later on the installment due which will most likely is your interest amount, since not yet VP.

Personal advise, if you can afford to pay more now. As long as the interest they charge you is correctly count, do pay up. As any excess of the monthly interest will deduct the capital loan. The more capital loan deducted, the lesser accumulated interest that bank manage to earn from you.

I have a property that started building not long. And my instalment is forecast to be RM3K when the property is completed. Now so far bank have only release 60K. The statement charging me only few hundred ringgit. But I ady paying RM3K monthly. Tracking by excel and obviously show I save alot in interest. So I am rushing over time to pay as much as possible before bank releasing more $ to developer.

Hi,

Outstanding GPP is total progressive payment you need to pay for that particular month.
You may wait end of this month/ next month to see actual monthly interest amount.

RM2100 is total you need to pay once complete.

This post has been edited by Kyotoarm: Jan 24 2019, 05:05 PM

This cleared my confusion.

I guess GPP stands for Gross Progressive Payment?

Okay, I’ll wait another month for it to appear

Thank you for the advise! 😊

very confusing statements.

you are referring to monthly progressive interest or monthly installment?

if monthly installment, all stated in your Letter Offer. This is also based on your loan tenure and interest rate.

PROGRESSIVE INTEREST. hence the topic. I know the monthly instalment amount.

Loan under maybank same as mine but different figure.

The RM 2100 shown will only kick off once the loan is fully disburse. For next month, the amount to be deduct is based on the completion % of your house.

If your calculation is correct, you will only be deducted rm1500 next month.

If you did not pay the RM1500, it will appear rm1500 at the outstanding GPP.

Thanks!

Actually, what does GPP stands for?

Tagging the most active mortgage specialist here to provide insight: wild_card_my lifebalance

During under construction period, which bank offering: can make extra repayment and those extra will go on to offset your principal loan amount.
Scenario:
60k disburse by bank at interest rate of 4.5%pa.
Monthly (30 days) progressive interest charged: RM222
You pay RM3000 instead. So RM2778 of the extra payment will deduct the principal loan amount.

Is the above scenario correct? During under construction period.
Thank you.

yes, in this scenario, 2778 extra paid is used to offset the 60k amount disbursed, so you'll pay RM2778 lesser interest

I have been tracking this closely with excel. The interest charge counted by daily-rest (not sure if this is the term).
Understand there are few types of mortgage loan where this method may not be the right formula for all. And of coz I confirmed with my banker before I throw extra $ inside, since is still under construction. And do monitoring every month making sure the figures appear in statement is what I expected to see. So it is good to check with your bank first.

I have a loan with Maybank and it is very difficult to check whether principal is being reduced. Don't know why they make it so unclear.

WRONG and RIGHT at the same time.

***********YOUR CASE IS DIFFERENT FROM TS CASE, BECAUSE UR STATEMENT IS ONLY FEW HUNDRED. TS STATEMENT IS FULL AMOUNT NEED TO PAY (MACAM VP-ED AMOUNT)*************

Let me tell you what is happening now.

There are advantage and disadvantage. But when the disadvantage falls on you, you will have a very huge headache and big burden.

This is the new tactic of the bank now , started by public bank, now not sure what bank follow suit. TS say maybank. maybe maybank getting on the thred.

thus,
have to make sure read fine print thougroughly to prevent from getting "trapped" like what happen to you.

Your advantage is that you save that interest, you are right no doubt.
You happy right, can save alot interest?

What are the disadvantage?

Let me tell u in simple term.

Disadvantage is when the developer KAPUT OR BANKRUPT. u have to serve FULL AMOUNTH WHICH IS RM3,000 FOR YOUR ENTIRE life., instead of just the progressive payment which is only RM300.

SECOND DISADVANTAGE- BAD FOR INVESTOR N FLIPPER
- if people take compress loan, GG orealdy, 2 unit need to FOCK UP full amount at one time.

THIRD DISADVANTAGE- THOSE WHO ARE NOT PREPARED OR CASH SHORT WILL BE SHOCKED TO THE BONE.
-they hear from other people that only pay progressive interest, so they thoguht they have more time to save up the money untill full disbursement. but mana tahu during progressive interest orealdi start to pay full amount

Two sides to a coin. depends on how u see it yeah.

This post has been edited by trust4you: Jan 25 2019, 10:19 PM

Why is it hard? One side is credit which are the monthly installments, on the debit side are interest charged monthly... the difference is principal reduction.

So, in short, just pay the Outstanding GPP?

Problem solved.


This post has been edited by Onioncapsium: Mar 1 2020, 05:54 PM

Standby 5% of the total loan amount. More or less

So what is the problem and how u solve?

May I know the amount to be disburse to Developer is determined by Developer or the Bank? Currently development at 2D should be 55% of the total price amount of the unit.

So I am wondering if I pay GPP now, is it 55% off the loan amount then x 30/365? or the disbursement amount determined by bank x 30/365?

For each stage of work done by the developer, developer will submit invoice to either you or the bank (assume 90% loan then it’s the bank) for disbursement. Invoice amount is based on the Schedule stated in your SPA. Bank shall only disburse based on the amount claimed by developer.

Note that developer might not claim the stages according to order, example if the drainage works are done first before your unit then they will claim stage 2g before 2d. You may refer to the current total amount you owe to the bank in your M2U account. It is not equal to 55% if claimed up to stage 2d. Note that the first 10% is downpayment paid by yourself and not disbursed by the bank, hence only 45% of the total property purchase price. Also you need to add in the MRTA amount if you finance your MRTA into your loan. If yours is semi flexi, you may also minus off any advance payment made into your loan account.

GPP (in other terms, progressive interest) is calculated on a DAILY BASIS as:
Total Owed to Bank x Current Interest Rate x No. of Days / 365 Days

Example:
Property Price: 500,000
Loan Amount: 90%, 450,000
MRTA financed into loan: 5000
Stage Disbursed: 2a(10%) + 2b(10%) + 2c(15%) + 2d(10%) = 45% of 500,000 = 225,000
Total Owed to Bank: 225,000 + 5000 = 230,000
Current Interest Rate: 4.0%
Therefore, GPP to pay on 1st Apr for the month of March = 230,000 * 4% * 31 / 365 = 781.37

standby 5% of the total loan amount for progressive payment??

Yes for total of progressive interest along construction period

Hello, just wanna clarify if the progressive interest is part of the total interest amount that the bank charges us? or is this additional interest charges?

What do you mean total interest amount?

Where did you get the figure? From the online amortized calculator?

If you are using calculator to get your installment amount and total interest paid over time, no that amount does not include progressive interest.

This is because online calculator does not take progressive interest into account, as every project has different completion time and will progress at a different speed.

This post has been edited by victorian: Aug 29 2020, 08:00 AM

Hi victorian,

Yes, I am calculating the total repayment I have to make on a monthly basis from P.Guru loan calculator.
So just to clarify:

Principal Amount : X
Interest Loan Amount : Y

The progressive payment doesn't deduct the amount of Y?

Sorry, first time house buyer :-D

Nope, X and Y is assuming you start paying full amount from first day, i.e for completed projects.

For under con projects, before you start paying x and y you have to pay z, the progressive interest that is calculated based on the disbursed x amount.

So the slower the completion of your project, the more progressive interest that you have to pay.

Thanks again. I supposed this is the "hidden" cost for newbies.

I read somewhere that we'll need to prep about 3-5% of the loan amount just to pay for this.

May I know if the breakdown are usually given by the bank?

To me, progressive interest has its good side as well.

It gives you more time to prepare before you start paying full amount. You can use the 1-2 years construction period to accumulate your budget for renovation.

Banks will not give you the breakdown. The schedule of payment is fixed and you can find it in your SPA.