QUOTE(kimhoong @ Jun 20 2009, 03:28 PM)
If I have more saving (per week or per month), which is more beneficial:
1) Increasing the frequency of installment (for example weekly)
2) Decreasing my principle (for flexi, semi-flexi monthly installment plan)
Kindly advise

PS: I know this should be discussed in the Housing Loan thread but as I have started it here, let's have some feedback from fellow members in this thread first before I ask this in the Housing Loan thread

The reason why I advocate the fortnight payment is to take advantage of the daily rest interest from the bank loan calculation. Years ago, local bank not willing to do daily rest interest and only foreign bank ie Citi/HSBC/SC etc.
So by doing fornight payment (splitting the monthly into 2) will increase the loan principal reduction calculation and expedite the loan repayment as you have seen.
Other may say why the hassle of fortnightly when you still paying 1 extra month per year and why not take that 1 extra month and divide by 12 and hence bump up the monthly amount while still paying it on monthly basis. This approach also similar and also reduce the payment period. The debate can be academic and hope someone else have the full financial loan sheet to demo this on the actual saving of these 2 approach.
Either way, you are paying that 1 month extra per year and it still save substantially at Rm24.7k. The diff of this vs your own self dumping money is, your set it up as a force pattern and forget instead of constantly making conscious effort to top up variable amount.
There are no extra effort, just setup a saving acct on the same bank and have it deduct automatically every fortnight.
Obviously you can do it weekly but moving from fortnight to weekly, the saving is not that much. and if your bank willing... hey every cents count.
If you have extra cash to clear off our principal, go and knock it off.... but why do that if the BLR is all time low and with the minus 2% from bank.. your effective loan interest is just than 3.55%.... surely you can keep the cash and invest somewhere for better returns...