Are we not in ASB loan discussion, i presume the refinance is related to the ASB rather than mortgage?

Anyway if CIMB ASB loan rate is better than maybank please PM me, i'm currently servicing loan from Maybank

well i from wht i heard from my prof, it is related to the economy yeah? and judging from our current state, it will only get worse since trump is the next president, most of the muslim country economy will get worse. is it making any sense?

Thank you for your reply and suggestion. Yes, I've called up the CS twice (my call was just ' suddenly cut off' by the CS the first time, no suprises with this particular bank) and was told that if the difference of the amount payable due to the change in the BR is less than RM50.00 then there won't be any revision at all.

Just did a search to verify such explanation:

Source 1
Source 2
Sufficient?   

If you are disciplined enough to save the amount, taking the loan will still earn you more as the dividend is on a higher amount. Add compounding interest and ammortised value, your money will multiply like rabbits.

And remember that ASB has a limit. So if you plan to put in your own saving, with already 122k in there, you only have a quota of 78k left which translate to about 15 years @ 5k per year. after that, you cannot put in anymore and your ASB is crippled. By the time, you will be too old to take a loan with max tenure to maximise the returns.

Here's what I would do if I were you. Firstly, congrats on amassing 122k at the age of 32. That's no easy feat by any means. Now make it work for you. Take out that 122k, put into ASB2. Apply full 200k loan on ASB. So technically, that 122k is earning you interest at 2 places.... ASB @ 6.5% & ASB2@6.0% for a total of 12.5%!!! your loan is only 5%

So in a nutshell, for a loan of 200k @ 5% you are already earning interest on 322k. Later when your budget permits, take out the 122k ++, put into TH or ASD and take another 200k ASB2 loan for the same reasons as above.

Add into the mix with ammortization... that'll just be your bonus.

Ammortization simple means that when you take a loan, every month the amount that you pay consist of 2 things - the interest to the bank & the prinsiple amount. Basically, at the beginning of a loan, the interest portion is higher and and the prinsiple portion is lower. As the loan progresses it will have an inverse relationship.

So.... basically when you terminate the loan, the bank will keep the interest paid but will give you back the prinsiple. When you get this back, it will increase your ROI. For me, i just treat myself to something nice as a bonus for being disciplined paying the loan. Or else, you can put it somewhere to generate further interest for you. As a guide, for 200k loan @ 5% should get you about 3k++ per year in the first few years.... that's almost 10k back into your pocket if you terminate after 3 years. Now tell me that isn't awesome!

And don't worry about the dividend rate so much! When you have compounded so much already, it's really a small matter. And the best thing is when it really doesn't make sense to take the loan anymore, Terminate and look elsewhere with no risk or penalty at all to you! Just walk away... 0 risk!

Hope this helps

Any asb agent can pm me? I would like to know the longer tenure asb loan scheme. I know about CIMB but what about other banks?

Thanks for this. I thought they blocked ASB OD for individuals long time ago and only allow sole proprietors. But after reading this it seems they allow back to individuals up to 67%.

Need to read up on this technique as 0.8% gain can be increased by reducing interest when you put in your salary in this OD account and pay your bills and commitments as late as possible. Timing would be crucial.

what's OD?

btw, i just learned from my friend that once we finish paying the loan, we will get cert instead of cash

and we can only get cash if the bank buys the cert. Is this true? I thought once finish, the loan amount will automatically be deposited into our asb account

what if the bank doesnt want to buy?

Good info there but still for me its not a good investment via ASB loan cos u need to wait 30 years then u will get those stated figure.

I know there a way settle your loan half thru tenure of loan & re-loan again & pay using profit from it. B
But this quite hassle & maybe during that time the rate may not be the same as per your 1st loan & mean you may not get what you plan from beginning.

2 kind of people invest in ASB loan -

1 - People who don't hv saving & force to save via this loan. its a great plan cos they only folk out the 1st year of repayment & use the dividend to cover next next next year repayment.
     In the end of loan,they only manage to get total of the loan maybe ++  abit .
     What if these people got financial problem that may need to use the dividend to solve other problem , mean that he may struggle to find money to pay the loan monthly installment.
     the only thing that may solve this only by cancel the loan but they may loss money due to surrender value may not the same amount with the first year own money installment.
     Lots of people trapped with this situation & still bank can make lots of profit.

2 - People who have saving (me as example)
     i hv around 190K saving & a banker friend ask me to loan (need to fulfill his target). Since i received dividend every year why not using it to invest to max my limit via loan.
     1st i only need 50K but banker friend said 100K will be better (my limit is 240K). so i need to open ASB 2 & transfer 50K with low dividend compare with ASB.
      I pay every month & not even touch the dividend (compounding dividend). after 3 years of loan, i decide to canx it cos need to buy a properties & rejected due to this ASB loan.
      That why i cancel this loan for me to able take housing loan.
     I been informed by my ex banker friend that this only benefit the bank more than the investor.

About the recently distribution announcement this is the easier way to calculate

Assume your loan is 200k
For 1st 10k use this formula

n/12 x 8.25% x 10,000

For the rest

n/12 x 7.25 x 190k

n=month

For example ur dividend is prorate for 9 month

Thats means u will get

9/12 x 8.25% x 10000 = 618.75 (this is include bonus 1%)

Then

9/12 x 7.25% x 190k = 11,756.25

Total earning = 12,375

-haziq-

That 825 part of it is the 10k dividend (725) and part of it is the bonus (100)

Try to calculate separately

12/12 x 7.25% x 10,000 = 725

Than

12/12 x 1% x 10,000 = 100

Total 825

I just use the simple formula.

Thats why when u have 200k loan only 10k use 8.25% and the other 190k use 7.25%

Not all people will get 100 from the 10k. If their loan is less than 12 month they will earn less than 100.

For example loan start february. Thats mean the bonus only calculate base on 10 month

10/12 x 1% x 10,000 = 83.33 bonus only.

Get it bro?

12/12 x 8.25% x 10,000 = 825

12/12 x 7.25% x 190,000 = 13,775

Total dividen + bonuses = 14,600#

It is.

As per the examples I have shown above... that is the difference of about 0.55% and 0.7%. For every 0.1%, every RM100,000 loan, you are gifting RM100 a year to the bank.

So imagine in the first year, your loan outstanding is RM200,000, the difference between your current rate and the new rate is 0.7%, you are easily losing RM1,400 just because of in action. And that is just for the first year, this repeats all the way (with reducing amount of outstanding) for the next 30 years

Current best rate with takaful is 4.85%, and without takaful is 4.9%

Let me know if any of you guys would like to make changes to your current ASB financing

For 200,000, 4.9%, 30 years tenure, the monthly installment is: RM1056/m

The difference is quite huge, check your current installment - it would have changed if you had taken the loan a few years ago due to changes in the OPR and subsequently your BR. You would have to pay more now than you had to a few years ago. maybe it is time to refinance? 

1 month's worth if you time it right.

Dividend loss: 200k * 1/12 * 7% = RM1166.67

Interest saved due to no disbursement during the same period: 200k * 1/12 * 4.9% = RM816.67

The difference is RM350

How much is the difference between 4.9% and say, 5.2% on a yearly basis again? And that repeats every year for the next 25, 30 years. You can do the numbers.

Yup that's quite high, in fact that some people have higher than that. Like my mom just refinance her asb. Her rate was 5.85%! Now take for 4.85%. Lowest in the market 😉

5.45 consider high. How long you already commit the loan.

Mine already 5.55. But i dun want to reset my principal just because to save few hundred. I already commit the loan about 3 years if im not mistaken.