Correct me if I am wrong, even if MRTA is bundled into your loan, during construction time, the interest you are paying is only the interest on the amount where the developer has drawn down.

So, if that's the case, you have not even started paying the MRTA portion of the loan, let alone the interest?

The interest you are paying is merely whatever amount that has been drawn down by the developer as per the construction stage? Correct me if I'm wrong.

You might be right in terms of when MRTA payment starts, which is the moment the loan started. But I can only speak from my current situation which maybe unique to me.

1) I was required to take up the MRTA for full term, 35 years as part of the home loan offer.

2) As the MRTA amount is huge, I was required to do medical check up. From the onset, I never wanted the MRTA but the bank manager told me if due to the MRTA amount more than RM10K, the underwriter requires me to undergo check up and the bank is obligated to get my consent to release the MRTA amount to the underwriter. Hence, the bank manager advised me to skip the medical check until it lapsed and the underwriter will officially decline the MRTA. The bank will then have to remove the MRTA from my existing loan.

3) True enough, 6 months passed, I received countless letters to do my check up but I avoided it, the underwriter declined the MRTA and the bank is currently processing the cancellation, which I hope will be done soon without any issue.

4) now going back to the interest on MRTA, in my situation, the unique part is that the MRTA was never released by the bank to the underwriter, hence, I am only charged for the interest on the 10% drawdown by the developer.

5) by this logic, I will assume that if MRTA is paid to the underwriter, the borrower would have been charged the interest as well.

Hope this clears the issue.

This post has been edited by adrianteo: Oct 25 2019, 08:25 PM