Clear loan first. If still got extra cash, put in FD.

Loan Amount (P): RM 300,000
Loan Years: 25 years
Interest Rate: 4%

can someone confirm… loan is daily rest, rate of calculation..FD is yearly compounded.. if neither is touched, loan will still cost more?
thus better to clear loan, correct?

Interest paid on loan is tax deductible

Interest from FD is taxable

Depends on tour tax position

Interest paid on loan is tax deductible

Interest from FD is taxable

Depends on tour tax position

Your math all correct but not use correctly.

1. You assume you have 300k in FD to get compounding interest but you compare this to getting 300k loan from bank. Note that if you have 300k to start with you wont need to get loan from bank the first place.

2. You assume FD interest rate equal to mortgage rate, which also untrue in reality.

3. You assume installment amount remains unchange over 3 years also untrue.

4. Your calculation of mortgage interest is using simple interest which also not the case in reality.

5. Property price may appreaciate abit over period of 30 years so really no apple to apple, FD rate also changes every year.

6. You buy a house for 2 purpose, own stay or rent out/investment, let say you ownstay, if you dont buy you have to rent, so you need to minus the rental from your FD interest to compensate in your comparison. Let say you rent out, you basically not paying (installment= rent collected), pay less than installment (installment > rental) or get rental income (rental > installment). When you sell the house, you get back the money.

Put half FD and settle half loan

Why don't clear housing loan first?