TnC;
3)...
a)for partial prepayment of the housing loan/term loan during the whole tenure, a prepayment fees of 2% on the amount to be prepaid will be chargeable which is to be debited into housing loan/term loan account;

-It means, if you make prepayment of RM 50k, you will be charged an fees of 2% over the RM 50k (RM 1k). If its RM 100k, then its RM 2k. In other words, if you dump RM 50k into the loan account to offset your principal, you'll only deduct RM 49k of principal.

b)for the prepayment of the whole outstanding housing loan/term loan made within the first six (6) years from the date of first drawndown, a prepayment fees of 3% flat on the outstanding amount of banking facility(ies) or RM 10,000.00 whichever is higher is chargeable.

-This is the penalty charged should you choose to fully settle the loan account within 6 years time from first release. Now i see the reason of the clause stated of RM 2% over the prepayment... cause your exit penalty is 3% from Loan OUTSTANDING, not facility limit.


Regards,

--------------------

Merce Chua
Assistance Manager
OCBC Bank (M) Bhd
Jalan Tuanku Abdul Rahman
019 - 913 1127
ChuaCChie@OCBC.com
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No point getting that clause since min penalty amt is 10k for full settlement within locked-in period rite..

Public Bank's exit penalty is also based on outstanding.
But i don't remember seeing prepayment charges...

Hi Daruma,

I'm not mortgage expert however i have applied for more than 10 mortgage products before and read most of the letter offer. This is the first time i see such clause. I think u applied for a term loan. However i'm surprise the rate for term loan is not as attractive too considering your loan size. The bank might "load" the lending rate if they perceived the property or the borrower is consider to be high risk.

Anyway don't think too much. Already sign, then there is no other choice. Good luck dude

The agreement does seem quite unfair. Which bank is this loan from? I am also buying house now and am looking at some bank loans.