The margin of financing is also known as loan-to-value ratio. It is the home loan amount expressed as a percentage of your property’s value. The lower the margin, the more “equity” there is in the property. The margin of financing can go up to 95% of the value of property, and is assessed based on:
i. Age of borrower
ii. Income of borrower
iii. Type of property
iv. Location of property
Some mortgage lenders may impose an early settlement penalty if the loan is paid off in full within a lock-in period, including refinance the loan with another lender. However, it depends on the term & size of home loan, the charge can be quite significant.
There are a number of related costs such as professional fees and government charges that you would have to pay when you get a home loan. Some common fees and charges you would expect to pay include:
i. Stamp Duties Fees: Sale & Purchase Agreement – ranged from 0.5% to 1.0%, Loan Agreement – 0.5% and Transfer of Title (MOT) – ranged from 1.0% to 2.0%
ii. Disbursement Fees: vary by state, land office and property type. Includes land search and bankruptcy search
iii. Processing Fees: one off charge by the lenders (can be up to a few hundred ringgit).
Bank Negara Malaysia raised the Overnight Policy Rate (OPR) by 25 basis points to 3% since last Friday. Following this, banks will increase the Base Lending Rate (BLR) sooner. So, for those who have variable loans especially housing loan will have to pay more in their monthly installment.
The reason for increasing the OPR is to cover the local inflationary pressures. The current inflation rate is about 2.9% and it is expected to continue to rise in latter part of the year. However, Bank Negara did a great job as they take pre-emptive action to push for economic growth before addressing the inflation issue.
Do you know how much of the latest mortgage rate for our home loan packages? As we known, banks keep on revising the mortgage rate from time to time. Therefore, we cannot tell the exact mortgage rate to someone. Based on current bank housing loan offer, you can get the mortgage rate as low as Base Lending Rate (BLR) -2.3%. Noted: The current BLR rate is 6.3%.
What’s The Current Home Loan Packages?
Different bank will offer different home loan packages. From what I can see is you need to have lock-in period with the conventional packages whereas Islamic home loan packages mostly will not have lock-in period.
Effective from 18th May 2010, the latest Base Lending Rate (BLR) for most banks in Malaysia will be at 6.05% per annum. Therefore, the BLR increased another 2.5% from 5.80% previously. This adjustment is made based on Bank Negara announcement to raise the overnight policy rate (OPR) by 25 points on 13th May 2010!
For me, Malaysia has a very high base lending rate, but this also means that our interest earned on fixed deposits is also quite high. From positive point of view, the BLR increase is a sign that our economy is recovering. However, I can feel that the core parts of Malaysia still very bad as unemployment, low salaries are some of the major issues facing by Malaysians nowadays.
So, with the latest increase of BLR in Malaysia, for sure it will further hurt Malaysians who is going to get new home.
These are the local and foreign banks latest BLR rate in our country: