Hi guys, I would want to learn from you which will be better option?

Say I have 100k in hand, would it be better to put in fd for a year to earn interest 4% per annum or dump in house loan to reduce home loan interest better?

What is the impact of putting in the said sum into house loan now vs I put it in after 5 years?

Thank you

Thanks for the reply. No worries I have sufficient investment in other place. Its just that this extra amount I'm thorn between to put in fd or house loan only.

since you had "investment" in other places, then i would assume you know about the ROI and the interest rate to pay too.

calculates it $$ variance, between FD and housing loan rate
then mathematically do you think it is OK?

btw, can you get better ROI with your 100k in other places OVER what the housing loan rate charged you?

Aiyo... simple...just put in whichever can get better ROI. If you put in TriumpFX for example, sure win and kaya. No need think twice
.
Disclaimer:
*The above is just opinion of an idiot forumner and should not be taken seriously.

If HL interest is 3.8 and FD 4%, is it worth the effort to earn extra 0.2% ?

100 000 @ 3.8% pa = 3 800

100,000 @ 4% pa = 4 000

Diff 200 ÷ 365 = 0.54 sen per day.

If only FD int is 8%, otherwise dump the 100k into HL.

This post has been edited by mini orchard: Dec 8 2022, 09:14 AM

Pros and Cons

Flexi loan - daily rest interest.
FD - need to wait maturity to get profit.

Flexi loan - floating rate adjustment. (OPR)
FD - fixed rate during signup date.

Flexi loan - semi flexi charge for withdrawal, fully flexi free.
FD - Able to withdrawal anytime, but profit burned.


So i choose flexi loan if similar rate and much more flexible.

This post has been edited by wilson1149: Dec 8 2022, 09:48 AM

When comparing loans with investments, just take note of one point ...

One can burnt the investments but loans will follow borrowers till grave.

This post has been edited by mini orchard: Dec 8 2022, 09:46 AM

if yr loan is flexi.. then dump into it to reduce interest.
at all times loan will be higher than fd.

but if yr loan is those cannot cash out. then u hv to consider the fact
after put in the 100k difficult to take out if need use for emergency.

Also is your home loan .. investment income ? means rental derived or own stay?

if got rental income then hv to look at your tax bracket if high, then no point reducing the loan.

Semi flexi loan. Its for own stay.

So far no plan to touch this 100k as this is really extra funding only.

In that case, your main deciding criterion is just the ROI, as others said.

Since housing loan does give higher interest, go for it.
I believe for semi-flexi loan, you can still take out the 100k (if really needed) by paying RM25. The risk is low.

if your house is being rented out, just put them in fd. Tax reasons

own stay just put into housing loan.. reduce interest...

If rented out, How do you reduce tax with that?

really extra fund...definitely go to House Loan for Semi flexi facility...
no brainer...

if really has concern...then just
90K house loan
10K FD for few months...until you feel safe to put into House loan...

Your housing loan is at what rate now? Surprised nobody asked this. If it is also 4% then to answer your question put into loan lah, if it's between the two.

Imagine if both were at 3.5% earlier this year. You go and put in FD for 2 years, then rate went up to 4%.. your FD is stuck at 3.5% and the FD interest can't cover your loan interest already.

rental income- interest expenses- maintenance fees- tafsiran- insurance= taxable income

You are right.. Nobody asked about this. However I find home loan interest rate and fd rate are just more or less the same.. Home = 3.97%.. Fd 4.05% 12 months. So can say the difference is almost negligible.

Oredi given example in Post # 6

FD and Loan interest market rate is thereabout. Dont have to calculate till the last dollar.

This post has been edited by mini orchard: Dec 13 2022, 10:08 AM

That's eyes-opening! Thanks for the info.