Free moving costs would usually result in not so favourable rates...U cant opt for a Non-Zero moving cost where you bear the legal and stamp duty fees..It is not necessary for you to finance it into your loan...just a lil advice...

my view is that ZMC is a very useful tool IF you r buying investment properties as it helps you lower you capital expenditure.

For own use properties, try to go for non-ZMC if u really can afford it as u'll benefit in the long run.

Yes, it is not from one bank, but from multiple local and foreign banks.

Not only that, some zero-moving cost will be e.g. BLR-1.6%
while non-zero-moving cost (need to pay own legal fees, etc.) will be BLR-1.8%
meaning the zero-moving cost package is using the 0.2% to offset the cost that the bank going to absorb.

Surface level, the 2nd offer seems worth to refinance for TS. TS have to do more homework on it

Agree. Do not be mislead/misguide by the loan sales/office. Go through each offer and ask questions. Do detail homework.

Thank you very much for the advices guys.

Will definitely carry out research and ask TONS of questions to make sure that I'm gaining from refinancing.

hi all, im very interested to write a letter to my bank to review my high interest rates, which is currently BLR+0.1% ..anyone has a sample letter?

From what i see, you are expecting FREE LEGAL FEE + SUPERB RATES ...

You have to know that, there is no free lunch in this world. People opt for ZEC package because they cant afford the legal fees / they do not wish to come out with a lump sum to pay the legal fees. Bank do not force you to take ZEC package which have higher interest rate.

And sometimes, financing in the legal fees so that the banker can give u better rate is a good choice. If it was ZEC, BLR -1.7% vs NZEC BLR -2.1 (with legal fees financed in), i believe the monthly installment for option B is lower than option A.

@ n73me : Unfavourable terms?

Let's put it simple, there are 2 ways bank can earn from your loan.
1. Interest Rate
2. Fee based profit (i.e late payment charge/apa-apa-apa fee for every few seconds/XX% for deposit blablabla)

Bank uses our money to actually give out those loan. i.e our FD/Current Account/Savings etc ...
So assume their cost of fund is the FD rate which is like 3.5% now.
At BLR (6.5) - 2.4% = 4.1%
It seems like the bank is earning 0.6%, but overhead cost etc? So it would probably means by giving BLR -2.4% they won't be earning much from the interest rate.
Bank is a business, would they be so stupid to actually kill their own profit?

There comes those penalty, fees, charges, bla bla bla bla ..... limitation so that you will die die stay with them for at least XX years, can't reduce principal more than XX %, every time you make extra payment XXX% are charged blablablablabla ....

So in other words, there is no free lunch in housing loan/any dealing with banks. Don't be idiot that chase for super low rates and die by their hidden charges etc......

ed0gawa,

If the bank term it as Zero moving cost, then there should not be any cost involved. Not hidden or repackage deals with fine print T&C. This is misleading the customer, similiar like MAS/AirAsia with Zero Fare flights.

And YES, if it is a Zero moving cost package as advertised, I am expecting FREE LUNCH. Don't explain to me about the offer, and at the end tell me add in X thousand amount into loan and pay installment. Normally when they reach this part, I cut short the conversation.

Recently a MBB Home Loan officer approached me with free lunch (real lunch). She has offer from MBB packages and I list down the things I'm looking for if I were to refinance my home loan. She did not get back to me (yet!) after 1 month.

Agree that bank is a business entity and need to make profit. Similiar like people in stock market who buy large amount of shares and sell when it increase RM0.02 and make a profit of few hundred/thousand. It is based on volume.

It should be straightforward. Don't know why the Maybank officer coudn't get back to you.

In our co. it is not only 1 but 8 banks reply within 3 days of your application. Those that fail to reply we consider they're either not efficient or not interested.

Another point, is the MRTA that is added to the loan amount and you pay by installment. Which is another no no for me.

Anyway, I am not desperate to refinance at this moment. Just surveying on and off for better deals, if available.

DannyOP,

I got no idea. If the offer is good for me, I'll take it. If not, I'll pass and wait another 6-12 months.

Sorry to TS, seems like hijack the thread already.

I'm learning more from this. Keep on going pls.....

As i said,
ZEC is for those that could not come up with the legal fees on their own.
NZEC is for those that wanna enjoy better rates.
NZEC with legal fees financed is for those that want better rates yet do not want to come up with legal fees.

U got 3 choices, no one force you which package to take. It is not a hidden terms that ZEC package has worse rate compared with NZEC.
Financing of MRTA is also optional. As long as you choose to take up MRTA, the bank has earn some commission from there. They don't care if you wanna pay cash or finance in.

There are banks with PARTIAL ZEC package, they only pay up legal fees to a certain amount.... can't really remember which, but i believe Maybank has something like that...

For those interest in NZEC where legal fees are financed in, IF the difference in rate is less than 0.3%, don't take it up.
e.g ZEC package = BLR -1.7%
NZEC package = BLR - 1.90%

Monthly installment of NZEC which be higher...

IF the difference is 0.3% or more, NZEC package installment will be lower.

** Above figures are based on serial of test i did, with legal fee quotation obtain from various law firm **

Lucky la you, I got mine 3 years ago 6.25% fix with AIA on 15 years loan. Now stuck dunno want to refinace or not. I heard from my agent lock-in is 4 years with 4% penalty. Any sifu here can advice whether I should refinance or not. I also think BLR will be low for the next 5 years or so, by the time I almost finish my loan already if BLR to rise again.

Suggestions and advice please.

Wow 4% is quite high, r u sure? Better to check your loan docs to confirm. What is your loan amount? I can check for u comparing both.

My loan amount is 230k, now left about 180k. How about MRTA, last time I bought insuran to replace it, do I need to buy again if refinance?

180k at 6.25% for remainder 12 years :-

1) RM1779.90/month
2) Interest payable = 76,306.49
3) Total payment inclusive of interest = 256,306.49


180k at 4.1% (assuming 6.5% BLR) for remainder of 12 years :-

1) RM1,584.70/month
2) Interest payable = 48,197.60
3) Total payment inclusive of interest = 228,197.60

Savings = 28,108.89

- update - have checked, you don't need to get MRTA since you already have insurance to replace it.
- upsate - for a ltd time the rate now is BLR - 2.5% (effective rate 4.0%).

This post has been edited by DannyOP: Nov 30 2008, 01:25 PM

At 6.25% of interest for remaining of 180k and 12 yrs tenure, your net interest paid is RM74,330 with monthly payment of RM1780

Assuming you refinance your outstanding amount with Zero Moving Cost Package at BLR-1.85% (Taking CIMB's Flexi loan package for example)

Interest:4.65%
Monthly:RM1634
Net interest paid:RM53,963

After minus the penalty 4% of 230k which is 9200, Total Saved is RM11167

For the insurance, if you purchase separately then should be able to continue to policy.

This post has been edited by VpowerZone: Nov 29 2008, 02:03 AM

Just got an update, lowest rate now is BLR - 2.5% at BLR 6.5% so 4.0%for a ltd time. You can put in your request first, then decide once you have the offer. Request is f.o.c

Thanks guys. I am now asking AIA to reduce interest rate for me, if not, after lock-in period next year, I will refinance.