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Mortgage trends and associated benefits in Malaysia
Property development has become a major business venture for thousands of people in Malaysia. Real estate stands out as an invaluable sector that is less prone to economic uncertainties and thus people tend to prefer it a lot. However, before you can invest in property, you ought to make sure that you have the right amount of finances to invest. If your savings cannot cater for the entire project, you will be forced to apply for a property loan.
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A look at how home loans work in Malaysia
The interest rates for housing loans in Malaysia today are quoted as a percentage that is below the Base Lending Rate or BLR. Due to recent changes that were made by Bank Negara Malaysia and a range of other major local banks, this base lending rate now stands at 6.85%.
It could also be Based Rate or BR. BR is set by each individual commercial bank, based on its own cost of funding. However, customer just need to be aware of the net interest which is BR + xx%.
In typical Malaysian mortgage scenarios, you are able to make monthly payments for a certain agreed period till that time you will have fully repaid the principal of the loan and its interest charge. Ideally, during the early years of the loan, most of your monthly repayments will be used to repay interest. As time passes, a larger percentage of your repayments will be used in paying down the principal.
So, how can you make use of a loan calculator?
A housing loan calculator helps to make the process of calculating monthly repayments quite easy for you. There are calculators that you will come across on the internet. If you feed in the price of the property and the duration into the calculator, it will compute the values and then present you with the best mortgage deals.
Understanding the different loan terms in Malaysia
In Malaysia, BLR or BR is used as a reference rate by banks when they want to decide how much they will charge for the various products that they offer. Home loans are also quoted as a percentage either above or below the base lending rate.