Different Home Loan Package

BLR(Base Lending Rate) is set by the central bank, and current BLR is 6.75% while fixed rate is set by the financial institution, normally they have a certain limit when you do the prepayment, you will be charged once you exceed the limit.

Different bank may give you different BLR rate, but 1 thing that I can tell you here is ABN AMRO Bank always give the lowest rate. (app 6.0%-6.5% )

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Thus you need to know what is your needs in order to choose the right loan package.

Fixed Vs Floating

Should we switch to a fixed-rate loan, as every increase of BLR will affect our cash flow?

It is beyond our expectation indeed. If the rates don’t jump a lot, floating rates loans may still be lower than fixed rate loans.

1) Short term property investor, they will look for the floating loan package, which is lowest rate or even zero interest rate at the 1st year. Once the capital appreciates in 2 years, they will sell off the property to gain the profits.

2) Own staying purpose, mostly people will go for fixed interest rate. This is because they are not planning to sell the house within 10years or 20years. Fixed rate loan provides peace of mind for those who like stability. The only downside of fixed rate is lack of flexibility, which does not allow you to pay off more loans to save interest and withdraw the extra that you paid.

*But certain bank have such feature like OCBC Islamic Banking.

Stumble it!

17 thoughts on “Different Home Loan Package”

  1. from the history record..the BLR rate can go up to 13% like that..it’s a challenge for home purchaser to choose…

    i don get what u meant by “normally they have a certain limit when you do the prepayment, you will be charged once you exceed the limit.”????

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  3. Fixed rate good for those who are scare of the unknown.

    Fixed rate may not be “cheaper” over long term as the market condition follow global financial system.

    Worldwide has experience “low interest rate” era. Unlikely Malaysia will have high BLR like late 1990′ because “Hot-Money” will come in for the differential in return (USD and Japan have almost 0% interest rate).

    Therefore, fixed rate may highly likely costs you more in long term.

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