Hi,

i got question regarding mortgage. let say i get a loan by mortage a property for 10 years. in 5 years i repay all the money. 1 - 4 years repay using the installment method and the last year the fifth year i repay all the balance.

my question is in the fifth year, when i repay all the balance, would the bank still charge me the interest ?

thanks.

You have to remember that the 5 years is from the final disbursement and not from your initial loan signing date or first disbursement.

No interest for the rest of the years would not be charged upon you.

you mean the bank won't charge me the interest for the 6-10 years if i replay all the balance in the fifth year

am i right?

Yes...but it must be over the "lock-in" period.
That is why banks always had a certain lock in period to make sure they gain profit in terms of interest.

oh ok ok..now i understand and do the car loan is the same? i mean installament for 5 years, repay using isntallment for 2 years and the 3rd year i repay all.

thankss

@Denise_D,
It doesn't work the same for car loans. If u take a 5 year loan and repay in 3 years, u will still pay the same as if it was paid over 5 years.

Bank lock-ins are usually 5 years.

oh ok...thank you for all the answer. i'm clear now...thank...tinkerbel and b00n

@tinkerbel
Car loan also quite similar also. You can try phone in to your financer and ask if you want to settle everything say next month, what's the remaining amount. Than you work back. It would only be principal amount that you'll have to settle. Go test it out.

car loan is NOT the same, according to the contract, u pay full interests. bank loan calculate and give you an amount that is only slightly less than borrow amount + interest for the 6th-10th year

house loan interest is strictly daily, weekly or monthly


house loan:

if 100k @ 5%, incurred daily, loan for 10 years
For Jan 2008, your interest is 31/365x100kx0.05=424.66 ( interest alone )
if you pay 1424.66 in Jan, that means 1000 will reduce the capital
Feb 2008 is 28/365x99kx0.05
... vice versa ...
on 18 Jan 2013, assuming ur remaining capital is 60K then the total amt u pay to settle the loan could b
60k + 18/365*60k*0.05 + (bank fee for early settlement if any, usually at max less than 2000)

car loan
if 100k @ 5%, loan for 10 years
your monthly repayment is (100k + 100kx0.05x10 ) = 150k
on 18 Jan 2013, u already paid 75K, to settle the loan you may pay 75K or 73K if bank give u incentive for early payment but usually they don't need to.

in house loan, the # of years dun matter as much as car ... in car loan, the shorter period the better, in house loan, the lower interest the better .... ofcourse, dun borrow money is best

Car loan example..
Loan amt : RM10,000
Interest : 5%
Tenor : 5yrs
Basically full amt to pay is RM10,000 + (5%*5yrs) = RM12,500
Monthly instalment : RM208.33

Fiist year total paid up = RM2,500.
But principal paid up is only RM2,000
So to settle the remaining is only RM10,000 - RM2,000 = RM8,000.

I've basically asked the bank before because buying 2nd hand car from a friend to work out the amount to settle.

Cheers!

Is the stamp duty already levy for 2008?
For example below 250k got levy 50%.

But the developer legal firm told me that the housing kementerian havent send out the MOT letter. So the levy is not entitle yet.