if loan 200k, need wait 3 years finish.

how much interest would i have to pay , until the house is ready in 3 years?

It depends on the amount of money release to the developer.

During construction period, borrowers are require to pay progressive interest. These amount of money are serving interest only. No capital reduction here unless you choose to start your installment.

Progressive interest are calculated and charged base on the amount of money release to the developer.

Assuming the bank has release RM 40k, and your interest is at 4%.

You'll have to pay [(RM 40,000 x 4%) / 365 ] x number of days in the month*

or RM 135.89 (assuming that month has 31 days.)

As more and more money is released, you are require to a higher amount of interest till the completion of the construction.



I'll try to run some simulation for you, will update this post probably in a few days time. (do remember to remind me... )

The simulation may help, but it is still speculation only. So bear in mind to use it as reference only.


hope the above helps.

This post has been edited by merce: Mar 24 2009, 11:34 PM

There are many different packages available, shop the banks and ask the loan officers to explain to you.

some package has 1st year zero interest, means you do not need to pay anything in first year, or all amount you pay in 1st year will deduct the principal.

this only available for the strong-base company...like sp setia, sime and etc.

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Added on March 26, 2009, 10:06 amhi, how was the simulation?

This post has been edited by cedrickang_8: Mar 26 2009, 10:06 AM

let me run some simulation for you all.

So let say the project progress is 30% at first year, 30% at second year, and last 40% at third year.
For under construction loan, the developer will request money from your bank base on the progress.
If the project completed 30%,then devoloper will ask your bank to release 30% from your loan and so on.

So the bank will also count the interest base on the money that already release.
Let say the interest rate is
1st year 1%
2nd year 2%
3rd year 3%
And thereafter BLR-2

For the first year,
30% released mean 200k x 30% = RM 60000
So the interest will be RM60000 x 1% = RM600 per year
So everyday interest will be RM600 /365 days = RM1.64 per day
so for Jan you will need to pay RM50.84 (31days)
Feb you will need to pay RM45.92 (28days)
and so on

For second year
30% + 30% = 60% released
200,000 x 60% = RM 120000
So interest will be RM120000 x 2% = RM 2400 per year
So everyday interest will be RM2400 / 365 = RM6.58 per day
so for Jan you will need to pay RM6.58 x 31days = RM203.98
Feb you will need to pay RM6.58 x 28days = RM184.24
and so on

For third year
30% + 30% + 40% = 100%released
So interest will be RM200000 x 3% = RM 6000 per year
So everyday interest will be RM6000 / 365 = RM16.43 per day
so for Jan you will need to pay RM16.44 x 31days = RM509.64
Feb you will need to pay RM16.44 x 28days = RM460.32
and so on

So in this case, your total interest for 3 years is RM600 + RM2400 + RM6000 = RM9000

Bear in mind all the money that you pay before the full release will 100% INTEREST only. Or else you request to pay more to principle.
When the bank already fully release the RM200k, they will send you a letter to inform you and let you know you need to start paying the installment already.
And the lock-in period will only start counting when full release for normal case. You can check it in your LO.
Mean if your lock-in period is 5 years, then your lock-in will start count on the third year, so total lock-in for this loan is 8 years


Let say your monthly installment for 30years is RM1000 per month,
I STRONGLY suggest to everyone to start pay your monthly installment RM1000 once you start paying from the 1st day.
This is because you enjoying 1% interest, why not start pay now to reduce more principle?
If you pay RM1000, minus the RM50.84 first month.
You can reduce you RM40000 by RM949.16 already
mean the next month you own the bank RM40000-RM949.16 = RM39050.84 !
And bank calculate interest base on RM39050.84 for second month, reduce interest summore!

People always happy to pay interest only cause they feel very happy to own a house by paying so little.
But do you know when your house finished, bank will start count interest with RM200k. All you pay before is nothing.


This all is just simulation only, rate and amount is not so accurate.

Cheers,
Onn

This post has been edited by onnying88: Mar 27 2009, 01:26 AM

Based on amount released, RM60000 or total loan amount?

I have questions. As follow,

1) Does it mean if the bank release RM60000 in the first year as in the simulation, if we dump in RM60000, no interest charged for the released RM60000?

2) Let's say one starts paying instalments, bank released RM60000, in let's say 6 mths, the RM60000 is repaid, until the next release, the borrower does not need to pay anything to the bank as the first release already repaid?

Thank you.

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Added on June 15, 2009, 10:52 amHi,

Any ideas?

Thanks in advance.

This post has been edited by yhgoh: Jun 15 2009, 10:52 AM

Theoretically it's correct. You don't have to pay a single cents of the interest.
You can double confirm with the bank.

Hi All,

I have a query regarding the "progressive interest" imposed by the Bank. I am getting the loan done for the property that is completing next year (currently at 20% completion).

When I met with the mortgage officer and he have calculated for me how the progressive interest is calculation. However, upon showing the calculation to the developer. The developer is telling me that I don't have to pay soo much for the Progressive Interest charge. Now I'm asking you guys cause I don't know which is correct.

Does the progressive interest charged by the bank is calculated from each drawndown, e.g :

Developer tells me
1st drawdown 10% 50k = interest charged on the 50k with the BLR given/annu
2nd drawdown 10% 50k = interest charged on the 50k with the BLR given/annu
3rd drawndown 10% 50k = interest charged on the 50k with the BLR given/annu
..... until 90% drawndown

Banker tells me
1st drawdown 10% 50k = interest charged on the 50k with the BLR given/annu
2nd drawdown 10% 50k = interest charged on the 1st drawdown 50k+2nd drawdown 50k with the BLR given/annu
3rd drawdown 10% 50k = interest charged on the 1st drawdown 50k+2nd drawdown 50k+50k drawdown with the BLR given/annu

I'm abit confused now cause I'll end up paying close to 10k culmulative for the interest for 90% according to the schedule given with the calculation given by the Banker.

The cost of the condo is about 400k.

Appreciate if you could shed some light on this.

Banker is correct.

I think this applies to certain loans rite only? unsure of the packages now.
But under construction loan usually cannot clear the principle 1st until 80% disburse or something like that?
so even you are paying rm1k permth, it doesnt clear your principle during under construction properties?
Sorry if i missed out your meaning

---

Added on September 21, 2010, 7:14 pmya i would think banker is correct.....i paid more than 20k worth of progressive interest for nearly 2 years be4 i can start reducing my principle on my 200k loan last time (blr was much higher then).
under construction interest can be quite a sum
Better pray your developer faster charge the bank until 90% so that u can faster start paying of the principle too

This post has been edited by mIssfROGY: Sep 21 2010, 07:20 PM

alamak. thanks everyone for the reply.. NOW I know who is right.. gonna burn a hole in my pocket even before the place is completed.

thanks for this info..
but bear in my mind, when u buy under construction property, its mean you buy at cheaper price compare to completed house.
Now i'm going to calculate my progressive interest payment.

Cheers!

The loan that I got lock in period is effective approved loan date meaning that for the under cons. of 2 years + 1 year after completion = total 3 years

If I manage to serve more than 70% of total loan owed, I'm still required to serve 1% interest per annum.

anyone has further info on SCB MortageOne home loan.

too many question but the ladies that serve me more less like MIA. regret!

bump to this thread...

i understand that payment paid during construction period is for interest only...

assuming my loan interest during construction period is rm2k per month...if i pay 4k, will the extra 2k reduce the principal, or merely for the payment for next month's interest?

i want to pay extra to reduce principal but maybe not every month; like if i have additional money then dump into the loan...will it automatically reduce principal or merely paying for the interest?

and do i need to inform bank that i'm paying for the principal?

aih confused...care to help anyone?

Some banks will take the extra to reduce principal, some other will carry forward the amount for next month.
Some bank need you to inform them every month that this extra payment is to reduce principal. You need to ask your banker la which one is your loan package that u signed

full flexi or semi flexi? Full boleh, and if semi, u need to call to transfer

taiko mai ukh ah ? coi lai wui oh?

This post has been edited by InF.anime: Nov 27 2013, 04:10 PM

hi ...can help me to calculed the progressive interest ?
my loan rm 480k , and bank give me BLR minus -2.4

mean for the 1st bank disburse the money to developer
then i will need to pay the interest on 4.45%?

My project will be complete on 4 yrs time. =(

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