2008 return is 8.75 sen/unit. I'm not sure how much is dividend and how much is bonus.

Bonus is pretty worthless. 7% dividend only?

Bonus is only good if uve been maintaining stable balance for the past 10 years or so

A lot of people take ASB loan as a mean of 'forced saving'. You can sometimes get more return compared to saving on ur own but you also have to take into account the probability of BLR going up, and if you fail to service your loan, they'll just sell your cert and make more money out of you.

I take the middle road - use savings to buy ASB cert and do an OD against it. Improves my cashflow a lot and I dont hv to worry about interest or repaying back too much - I only hv to serve the interest of whatever amount that I withdrew. At the same time my ASB is still untouched and can get decent amount of dividend

Vieri,

Hi. Appreciate your thoughts First of all, it's not risk free. Investment-linked products are never risk free. Yes ASB typically beats returns from other type of investments as well.

But you have to remember that prior to 2004, ASB loans were BLR+something, typically BLR+1.00 (this was when BLR was around 6.00). If they take a loan during this period, after 2006, they have to serve 7.75% interest on 7.30sen return (2006) and 8sen return (2007).

(1.25% / 1% / 1.75% bonus is only worth something if you've been maintaining a good balance for the past 10 years). This year, they're paying 603m every 1% dividend and only 678m on 1.75% bonuses.

If you want to argue about 'free money' on the 1-2% - then I have to agree with you. But remember that , for these people, banks typically push for max loans that they can afford (or cant afford). I was offered 50k ASB loan on 2k salary at BLR+0.5% a couple of months back - go figure. That's excluding hidden fees such as MRTA, stamping fee, agreement fee, sijil fee, early exit fee etc.

Currently the market loan rate is very good. I'd say go for it if you can. Make sure that you have enough money to cover the interest for a year. Dividend is compounding ONLY if u keep them inside (means payment for interest hv to come from your own pocket). Shop around for better rates - Maybank's rate for home mortgage is among the lousiest, I assume the ASB loan rate is the same too.

Collected info :

RHB : BLR - 1.25% for whole tenure
CIMB : First three BLR - 1.6%, rest BLR - 1.3% or First 5 years BLR - 1.4, rest BLR - 1.3%

Maybank's rate given by Vieri777 is only for loan >50k

There's another rate by Maybank but only for 50k and above

First 2, BLR - 2. Rest is BLR - 1.25

You can always refinance after 2 years. No exit penalty

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Added on December 18, 2008, 8:30 amThis only works if you do hv a decent sum of dough to start with, else the ASB loan is the only other option

This post has been edited by Syd G: Dec 18 2008, 08:30 AM

ASB loan Maybank BLR-2? I called my personal loan officer

OD can start from 5k onwards. BLR-1 for CIMB (90%), BLR for RHB (100%), BLR for Maybank (90%)

I heard from the radio news that OPR is going down again (US planning to cut to 0.25%. wow). Good news to people with good payment history. Cheap loans

Depends on how far you are in the loan. A few Ks that you paid upfront was for insurance for the whole X years that the loan was for.. so if you're just 1-2 years in, I'd recommend keeping it in there.

If you've had it for 10 years or more then diff story.

And it also depends on how u look at the loan.. if it's a place for u to generate profit, it's not much.. about 2% ish a year.

But if it's a place for you to do forced savings, then just keep it. After finished paying, you'll get the whole amount anyway.

I'm a big fan of properties. So if I have an old ASB loan with about 50-100k difference inside (cert amount - loan amount), I'd rather withdraw and invest in properties.

You're right. But how many of us are married with both spouse having 200k in our ASB? I personally dont have a ASB loan cause I dont like to be tied to a bank. It will effect my job choice, my lifestyle etc. But my husband does because he has quite a stable job and our installment is about 10% salary only. Forced savings

Yes properties take more effort n risk. Bigger returns need bigger effort n risk ma But I have almost 10 yrs experience of managing rentals, so that's within my alley. Some people may prefer stocks, gold, forex etc.

In the end, it all depends on your investment goals and your risk appetite

didn't know that cimb offers asb financing for 30 years. previously max was maybank @ 25 years

Price:rental ratio is getting better compared to last year. The ratio was super crazy last year that rental is not enough to cover a 30y monthly installment at such a low interest rate environment. Well at least in areas that I'm interested in

For capital appreciation, yes it's slowing down. But the best time to buy is during a slowdown when ppl dun hv enough holding power and prefer to dispose with some losses.

Nowadays we can find subsales cheaper than auction prices....

Anyhoo back to ASB loan. Banks are still offering them. What happened to the news that BNM wanted to limit them to jaga our household debt ratio?

Just came back from CIMB

ASB OD with them only allows for 67% margin. BR+1.35% (5.35%)

Boss what's the upfront fees? 😁