As per topic, can you settle the monthly repayment if BLR increase to 12%?

Example 1
Property price = RM 100k
Loan amount = RM 90k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 583.74
If BLR = 12%, the monthly repayment is RM 925.75

Example 2
Property price = RM 200k
Loan amount = RM 180k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 1,167.48
If BLR = 12%, the monthly repayment is RM 1,851.50

Example 3
Property price = RM 300k
Loan amount = RM 270k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 1,751.21
If BLR = 12%, the monthly repayment is RM 2,777.25

Example 4
Property price = RM 400k
Loan amount = RM 360k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 2,334.95
If BLR = 12%, the monthly repayment is RM 3,703.01

Example 5
Property price = RM 500k
Loan amount = RM 450k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 2,918.69
If BLR = 12%, the monthly repayment is RM 4,628.76

You may refer to the calculation from fiscal-wisewebsite

This post has been edited by arthurlwf: Jul 14 2008, 03:18 AM

don't you think this should be in kopitiam?

frankly speaking, if the blr is 12%, i can assure you that means msia economy is worse than 97. with that said, a lot ppl will be committing suicide.

and for me, i shall invest all my money into FD that will roughly yields me 10%/pa

if the blr hits this high, i think i will pay down all my loans 1st before thinking of any FDs

Bank Negara won't let this happen at the moment

mm i need cash flow, so paying everything down might not a too good option, a mix of loan and cash is good if done correctly unless you have serious debts to handle.

if you have the capability to pay all at once, am sure you have loads of cash available, of which the hike of BLR might not affect you so much as you have cash to yield interest, which actually offset the % of hike theoretically.

the hike of interest of normally affect ppl who live with minimal savings and most of the salary is contributed to loan repayment. but yes, im sure everyone is affected.

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Added on July 14, 2008, 8:53 amwell, its not up to BN if the economy really suck that bad..

you need to attract oversea money into the country, else your currency would worth nothing, just like indonesia.



This post has been edited by wheimeng: Jul 14 2008, 08:53 AM

I thought the FD interest rate is only 3.7% p.a? Do you mean the FD interest rate will go up when the BLR is going up? 10% p.a..... Are you serious?

@agape_ian,
If BLR increases, FD rate will also automatically increase. It might not go up to 10% PA but back in the 97s, FD rate did hit 10% PA; that was due to high BLR + BNM also wanted to encourage 'savings' hence the rates then were all-time high.

the last time BLR hit 12% n up , it only lasted few months, goverment won't allow it to be at all time 12% , it will kill the economy, this is when the reserve fund comes in use.

@tzeyin,
That is right If FDs can give us 10% PA I'll put what I haf in it too *grins*

but it comes with risk...

hahaha.. but yeah... 10%/pa guaranteed, man, dump it all in!

All,

1) If you REALLY worry about this, get a loan where the tenure increases (more monthly payment ) instead of LARGER monthly payment when BLR goes up.

2) What makes you think it will not be worse than 97/98??

3) What makes you think Malaysian economy will not get killed this time??

For (2) and (3), the signs are all around us.

Dreamer

those were the days la with 10% pa FD rates... remains a dream...not sure will reach that rate again...but if FD rate reach that high...home loan borrower also kena until mati katak la...haha....

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Added on July 14, 2008, 7:40 pmwhat are the signs you are talking about?

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Added on July 14, 2008, 7:41 pmin my personal opinion, i think it's better to assume you can cover 2x your loan repayment if BLR suddenly shoots up...better to be safe than sorry...

but that's my style...some ppl might be ok to take higher risk...

This post has been edited by kevyeoh: Jul 14 2008, 07:41 PM

@kevyeoh,
It's really not a good sign if FD rates go up to 10% PA. It might be good for the few people who's got cash at hand but overall it means we're doomed *gulp*

Yes the signs are all around us; US is oredi suffering from recession

The problem is whether the government have any more reserve fund to rescue the economy...

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Added on July 15, 2008, 12:19 amDon't you think this topic relates to housing loan finances?

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Added on July 15, 2008, 12:25 amAgree with your point 1.

As for point 2 & 3, mind to share with us the reason you think its possible to be worse than 97/98 and Malaysia economy to be killed...
Unless you are referring to Malaysia's depleting reserve fund which was due to fund wastage done by the government.

This post has been edited by arthurlwf: Jul 15 2008, 12:25 AM

BLR up = inflation up
inflation up= economy down
economy down = malaysia die

even BLR will be raised also just for certain period only.. but i think also wont be raised til 12% gua?

In economic term, there is a life cycle which means what goes up will come down. And vice-versa.
This does not indicate that the economy will die.

The economy will die if what goes down and doesn't come up...
Or took very very long time to come up...

This post has been edited by arthurlwf: Jul 15 2008, 12:32 AM

Based on a recent survey on purchased Propery price, the mean is from RM 151k till 350 k.



Attached thumbnail(s)

It had happen twice in the past (30 Nov 1984 & 30 June 1998), what makes you to think it won't happen again?

Below is the proof



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If BLR up to 12%, a lot of business will bankrupt and close shop because already can't afford to cover their business loan which used BLR as interest calculation.

Example 2
Property price = RM 200k
Loan amount = RM 180k (Borrow 90% out of the property price)
Years Tenure = 30 years
If BLR = 6.75%, the monthly repayment is RM 1,167.48
If BLR = 12%, the monthly repayment is RM 1,851.50

i loan up 216k to buy house now..dun scared me lor...

12% only ark? I tot it was 14%. Coz the fd rates went up to 12% or something the last time i remember....was too young not too sure, but the fd was at 12% at one point.

The worry that BLR will go up and down over the long term, is why Islamic Financing with its fixed "profit" rate, has been gaining a lot of interest (pun intended).
When you consider, most people take long term loan (e.g. 30 years term), BLR can swing up and down, economy can swing up and down. Your income can also gyrate during these times...
From past few decades, the economy has been in roughly 10 year cycles,so for ppl having 30 yr loan, need to consider that every 10 years whether can keep up their monthly payment.

Those who makan gaji, their company they work for can go bust. Those in business will feel the downturn even more. Of BLR go up, spending will go down. Those with loans will suffer, and those without loan will hesitate to take loan (cos interest so high)....talking about effects of recession can fill up a whole book...haih...

Dont think the BLR will be increased to 12%

most banks now have home loan rates capped at around 10%

Wasnt an announcement on the BLR supposed to be on Jul 25? I didn't hear anything so shouldn't that be good news?

confirmed no changes. announced by gov yerterday.

Wow 12% is really high. I guess can cope but maybe negotiate to lengthen loan period so that got some breathing space.

Yeah.. saw in news.. But you know our gov right. The day before fuel naik harga.. say wont rise up the price.. but last minute say.. Kita Tak boleh subsidi lebih naik by 0.74 sen liao. Haha.. Hope that won't increase too much or not have to pay through my nose for house installment.

@vincentlee,
Yeah.. I don't know if we realli can trust OUR government - plus, it's no increase for now - we realli wouldn't know what would happen 6 months from today

BLR will not reach 12%.

(Current) Government has stated its preference. Economic growth will be maintained at the expense of higher inflation.

You will never have to worry about BLR reaching 12%.

http://www.bnm.gov.my/index.php?ch=8&pg=14&ac=1664
Based on this assessment, the Monetary Policy Committee has decided to keep the Overnight Policy Rate unchanged at 3.50%.

if, the blr reach 12% or even 14% which claimed by someone, i will be the first one to declare myself as a bankcruptcy. ok, lets make it simple, if you have a property which is on mortgage loan, especially from PUBLIC BANK, and you wish to revise your current lending rate, perhaps, you should seek the advice from the senior loan officer, and you will find the outcome.

u can never trust the government promises now!!!

the damn BLR better go up because I spent a lot of effort locking my rates at 5.5% for 8 years, thanks to rumours of BLR rising. Now i m bloody paying extra 0.7% (taking BLR -2.2%, BLR=6.8%)!!!! No fair man!!!!

jacc, don't worry, sooner or later it has to go up. i doubt our blr will be maintained this low for the next 8 years.

many central bank around the world have increase their interest rate to clamp down on inflation, will there be problem if we dont raise rate, like people moving money out to other country that have better rate?

according to geoarge soros, a recession is coming which is worst that the deep depression happened in 1930s. but he say it may affect other regions and it may not. depends on many factors such as oil, us/euro/reminbi dollars, china economy and so on

one thing i find interesting, despite economy is becoming bad, ppl still buy unit trust or investment link, the economy not good, and they still think they will get high returns. God bless them indeed

go read his latest books, quite interesting.

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Added on August 2, 2008, 1:26 pmjapan reduces its interest rate to 0% before. Federal reserve also did that before. now see what happen to their economy ?

Credits become so much more and ppl tend to spend more. Ppl spend more means high inflation. Rules become more lenient, meaning bankers can do anything they want. All this years, as many can see, alot innovative products or funds has appeared. So is the numbers of new markers for investments.

The recent maybank takeover of other banks show that they have the power and can do what they want. but of course now the BNM want them to stop it or reduce their shares on PT.

Despite the oil price per barrel have come down, I heard that oil will come up again becoz winter is coming. Winter means more oil usage.

This post has been edited by wingcross: Aug 2 2008, 01:26 PM

ahhh scary. A recession worse than the 30s? That was already practically rock bottom... Malaysia will not be immune if major global economic crisis hits... It makes one wonder if one should purchase a home to ensure one has a roof over their heads before it happens or wait and see if prices hit rock bottom and buy then.

Aihs... If interest rate goes all the way down to 0%... I am not sure what that would mean for m'sia but seriously, could that happen here? Different countries have different economic strength and weaknesses no? If someone had studied economic histories of many many countries then maybe it would be easier to come up with a possible analyses of what we can expect.

Maybe best to change RM to stronger currency to maintain value of our $$$? :/ I wish there was a clearcut answer.

that is one way of doing it, raising rate and allow RM to rise, but this all depend on what the government plan is.