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