Hi. I have an home loan offer from 2 banks which have the same effective lending rate (3%). However, Bank A base rate is 2% and spread rate is 1% while Bank B base rate is 2.5% and spread rate is 0.5%. From this scenario, would be able to say which bank has the better offer?

Base is variable. Can go up or down. Normally is according to BNM's OPR rate.
Spread is fixed. Will not change throughout your loan tenure.

Effective interest rate = Base rate + Fixed spread

Does that means a lower fixed rate is better if both effective interest rate from both banks is the same?

Parking.. has been waiting for answer too.. seems no one can answer it

Curious to know too.

In my case it was an easier decision since the one with higher base rate with lower spread rate total is marginally higher than the other option with lower base rate and higher spread rate.

In the scenario above where it's the same total % it would be interesting to know.

hihi... hope the post owner has chosen the one with lower spread rate... as spread rate is GENERALLLY fixed and the greater news is that effective Aug 1 2022 is the standardised base rate... so u can opt for REFINANCING if the new rate u found out is lesser than what you are paying now...cheers!

So 2.8+0.2 is better than 2.5+0.5?

Theoretically, yes, each bank has their own base rates so if 2.8+0.2 suddenly gets more efficient then it may go down to 2.5+0.2

This post has been edited by elimi8z: Apr 29 2022, 12:00 AM