Refinancing your existing home loan can save you a lot of mortgage interest. In certain cases, you can easily save more than a hundred thousand ringgits if you borrow a substantial amount of money to buy your residential house.

The reason to refinance mortgage:

  • to save interest cost with better home loan package offered by other banks
  • to reduce monthly payment
  • to reduce or prolong loan tenure
  • to cash out the home equity for emergencies or other needs such as children education and business venture.
  • maybe it’s just simply to enjoy better flexibility in managing cash flow
  • to consolidate all other debt into one with the lowest interest charges

How much can you save by refinancing home loan?

For illustration purpose, I will use an example of an engineer to calculate how much he can save by doing refinancing
Home loan details:

  • Start paying monthly installment on 1st January 2004
  • loan tenure 30 years
  • mortgage interest rate with his existing bank: first year 2.5%, 2nd year 7%, 3rd year 7.5%, 4th years onward 7.75%

Refer the schedule of payment below:

After the lock in period of three years with the existing bank, I adviced him to refinance his mortgage to OCBC bank on January 2007. There will be no penalty on early settlement after the lock in period of first three years. Currently OCBC is offering fixed rate package of

  • 1st to 5th year 6.18%
  • BLR – 1.55% thereafter ( BLR or base lending rate = 6.75%)
  • moving fees is absorbed by bank

To compare apple to apple, I calculate using the remaining tenure of 27 years and only refinance the principle of RM191,204.55

The new schedule looks like below:

Before refinancing, he would have to pay RM1410/month installment.
After refinancing to OCBC bank, he only pays RM1214.67/month, providing him a positive cash flow of RM200/month.

Compare the total amount of installment paid after 30 years:
1. No refinancing: RM498,625.39
2. With refinancing on 4th years: RM408932.28
Total saving is RM89,693.11.

He can save even more by doing refinancing after serving OCBC mortgage loan installment for five years, which is the lock in period practiced by bank at this moment. It is a simple strategy to always refinance your home loan after the lock in period. This will definitely save you a lot of mortgage interest cost.

If you are interested to get an amortization table or loan schedule for your current mortgage, feel free to contact me.

For more information and tricks on mortgage loan, read my other related articles:
Save interest on homeloan
Mortgage: the cheapest debt
Buy House before Car
Malaysia Home Loan Resources

Information needed to calculate cost savings for refinancing

  • outstanding loan
  • installment amount
  • interest rate
  • current loan tenure
  • lock in period at existing bank (normally 3-5 years)

If you find it hard to get the information above, maybe you lost the offer letter or loan agreement, you can call your bank customer service center:

Customer Service Call Center of the Banks in Malaysia:

  • AmBank 03-2178 8888
  • AIA 03-2056 3207
  • Alliance Bank 03-5516 9000
  • CIMB Bank 1300 88 0900
  • Citibank 03-2383 0000
  • EON Bank 03-2148 8077
  • HSBC 03-2050 7878
  • Hong Leong Bank – 03-7626 8899
  • Maybank 1300-88-6688
  • OCBC 1300-88-5000
  • Public Bank 03-2176 6000
  • RHB Bank 1800-88-9922
  • Standard Chartered Bank 03-7711 8888
  • United Overseas Bank 03-2612 8121

Home Loan Calculators:

Other relevant articles about buying house in Malaysia:

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Personal finance author and trainer

    57 replies to "Refinancing Home Loan: Save Mortgage Interest"

    • Vijayan Sinnasamy

      Dear KCLau,

      Good day to you hope you are well, I am Vijay here saw your blog yesterday would like to seek your help regarding Refinancing my existing Home at Senai Johor which already fully paid. Now the current market value is RM 250,000 and Now I am facing some financial problem so I have decided to refinance my house to clear all my debts. Now I am working in Pengerang Rapid project and my earning is about RM 13,000 per month. The problem I am facing is I was jobless almost 10 months and just got a job in the month of January 2017. My debts are bothering me too much where I have credit card overdue payment, house loan, car loans where I have to pay about RM 6000,00 on a monthly basis for my installment. When I try to contact banks (Public bank) they told me since I am a contract staff I have to work for at least 6 months then only the bank can consider me for refinancing, and this fully paid house is under wife’s name and she is not working at the moment, so she can’t apply for any bank loan so I decided to take the loan under my name so how could I go about it and if you have any ideas please assist me. I need to take the refinance loan to lessen my debts and burden. Can you recommend me if there is any bank which you know can help me in my current situation so that I can apply. Sorry to bother you and hoping to hear from you soon until then take care and have a nice day.

      Thanks & Regards,
      Vijay- 016-5948983 ( JB )

    • Angie

      Hi Mr. KC Lau,

      Actually i would like to mortgage my housing.And i did call my loan banker about this and they request some documentation to support. Unfortunately 3 years ago my husband previous company shut down and right now he work as part time sales person.
      Therefore, he don’t have any documents to support.And for your info this property
      only my husband name.
      Pls advice is that any other way to do this?
      Thank you,
      Regards / Angie

      • KCLau

        Hi Angie, you can engage mortgage advisor who can advise you on how to get the proper documents.
        In your husband’s case, if he file income tax, the Borang B and tax receipt are the documents needed.

    • Jimmy

      Hey Mr KCLau,
      I will be settling my government housing loan fully in a few months time. For your information, I will be retiring end of 2016 upon reaching the retiring age of 60.
      I have a plan, that is getting a loan from bank using my house as a collateral. I intend to use the loan to buy another property. The main objective is to create a little source of income from house rental.
      I need your advice. What type of mortgage housing loan is suitable for me at my age? Let’s say I take a loan of 500K. Which bank should I approach to get the cheapest rate and prolonged length of repayment?
      Please reply via my gmail.

      Your advice is greatly appreciated. TQVM.


      • KCLau

        Hi Jimmy, it is advisable to get a mortgage consultant who knows the market well. Banking products keep changing and you’ll need to know what is available in the market now to make informed decision.

    • John

      I’m considering which loan package will be suitable.
      I’m planning to purchase property (750k). Means loan application will be 680000. My concern as below:

      1) Does conventional full flexi loan vs islamic full flexi loan got any differences? The only differences is Islamic loan covers 20% stamp duty, but does it got any disadvantages (hidden agenda)?

      2) Incase i’m dumping my entire salary in the current account (full flexi), but by end of month i’m finish using the entire amount, does it means i should not go for full flexi loan (bcs got RM10 monthly charges)?

      Appreciate for your feedback.

      • KCLau

        1. There is some cost saving as your realize for Islamic loan. If you think the cost saving is important, you should consider Islamic loan since it is quite competitive too.

        2. In this case, you will still save some interest because it is calculated on daily basis. Any money in your current account is going to reduce the amount of interest charged. But is it high enough to justify for the RM10/month service fee, it is up to you to justify that. Most likely it will save more than RM10/m interest. Moreover, it gives you the flexibility to move out your money anytime.

        • Lee

          I need some help from you regarding housing loan from bank issue. Please feel free to contact at 01133163557 – Ms. Lee / 0167137597 – Mr. Lee

    • chooi

      Hi KCLau,
      Heard from the forum that there is no more exit penalty for bank loan started 1/7/2012.
      Is it also apply to those bank loans signed before 1/7/2012?
      Need your clarification on this.
      Many thanks!


    • Yu

      Hi KCLau,

      Just need to pick your brain and get some advice from you. Have a loan proposal from hong Leong Bank and RHB bank as follow:

      Loan amount :500K
      Interest: BLR-2.45%
      Tenure:10 years
      Mortgage plus package whereby I have to open a current account with them. The interest will be calculated on a daily rest on the difference between loan amount and the current account. Need to open up another FD account of 200K to enjoy rebate on stamp duty of 3k. Is this a good package?

      Conventional loan except the interest rate is BLR-2.5% daily rest

      Which is better given that one is conventional term loan with lower interest rate while the other package need you to put in more money and give you a saving on interest?

    • A

      Hi KC,

      Is it true that we pay more on the interest charges in the beginning of the loan tenure and pay lesser interest nearing to the end of the loan tenure?

      Appreciate your advise.

      • KCLau

        at the beginning stage, your loan amount is higher so the interest paid is also higher

    • Saviour-V

      I’m wondering if it’s possible to finance my car loan using the amortization model, KC.

      Here’s my current scenario: RM 40,000 loan from Maybank, 3.88% per year, and 9 years to pay it off. So, according to the Future Value Simple Interest model:

      (RM 40,000 X 3.88%)*9 years is RM 13,968 interest total, and when this is added to the RM 40,000 and divided by 108 (9 years X 12 monthly payments), my monthly payments (principal + interest) are RM 499.70, or RM 500 when rounded up.

      But according to the amortization model, which I’ve calculated in Excel using PMT, my monthly payments are about RM 439.39 or so, which is a whole lot cheaper.

      So, is it possible to use the amortization model for car loan financing, or am I stuck with the other model? I’d really like to reduce my expenses a bit.

    • jaafar mohamad

      Thank you for this very informative site. I am almost 59 years old. I already have a house in Nilai can could easily be sold at RM 600k. I intend to buy a old property at RM500K in KL and will require RM200K to renovate. Based on my age is it possible for me to obtain a mortgage for the house at Nilai and I would need about extra RM 100K to upgrade the house. I am still working and obtaining RM10K a month on long term contract. Please advice. Thank you

    • Sue

      I wanted to sell off my house and my loan is still in lock period with OCBC bank. Penalty is 3% and admin fee is RM5K. Is that such a high fees on admin?

      • Sue

        They mention that the 5k admin is because they pay for me the valuation+ stamp duty + entry agreement while im paying for S&P. My loan is 140K. Possible to argue to lower the admin fees?

        • mickey

          I’m facing the same problem as yours. What is yr outcome in your case currently?

    • ezan

      1st property to buy,price rm260k. im 29 years old. im applying home loan for a several bank such as cimb, bsn, hsbc.i need ur suggestion :
      1.what i should consider before choosing the best home loan offer?
      2.MRTA, how long the best coverage ratio for me? moving cost/ non free moving cost i hv to choose?
      4.or any else that i have to know?

    • Lee

      what are the spread margin of banks in malaysia from year 2000-2010????????????? help me!!1

    • Peter Lim

      I’ve written an article about such so called “Mortgage Reduction Company” on my website :

      I personally think you can do without those company.

    • Lina

      Hi KC,
      Just wondering in case you know after refinancing, can we sell the house before exit the lock-in period? Is the lock-in period apply to selling house also?

      • KCLau

        Hi Lina,

        When you sell a house, you need to settle the loan. In this case, the buyer will get the money to settle your housing loan. That’s known as early settlement as well. So the lock-in period still applies.

    • yus

      Hye Kc.
      plz give me ur mobile no for help me to refinance my house.

    • housing advice

      Refinancing your mortgage is not a bad idea if is viable to accomplish can still afford the repayments on the mortgage. Some people have jump into doing this without fully thinking of what needs to be done and just assumed it’s a way out of a bad mortgage to a good one. When refinancing talk to a financial advisor and find a mortgage company ‘will’ offer a better interest rate as you don’t want to charge more than previously. Good article.

    • Lee sai kay

      Hi ,

      P/S : Now my loan from 3 year is 7 %

    • Lee sai kay

      I have my house loan with eonbank still in lock in ( just paid in 3 years only . actual in 5 years ).
      Can i refinance this loan with another bank ( please suggest which bank ) . How much is this possible for Eon bank charge penaty ? If they not agree , which way i should do to less my loan , Because i want to make the new loan for another house

      • KCLau

        7% is high. You can refinance it. Talk to a mortgage officer to find out the option.

    • Amak

      Dear KCLAU,

      First of all, thank you for outstanding financial blog.
      I am sure many visitors have benefited and educated themselves greatly.

      I would like to ask you on the following current scenario with my home loan Alliance bank mortgage.

      I have taken housing loan loan of RM297,500 plus MRTA 16,790.00 , in December 2006
      The tenure 348 months ( 29 years)

      The interest structure rates were stated as below :
      For 1st year at 3.80% p.a on daily rest
      For 2nd year at BLR + 0.00 % p.a. on daily rest
      For third to 15th year at BLR + 0.30 % p.a. on daily rest
      For 16th to 20 th year at BLR – 0.35 % p.a. on daily rest
      Thereafter at BLR – 1% on daily rest
      At time the BLR was 6.75 %

      Which projects to the following repayment amounts accordingly :
      1st year RM1,492.00
      2 Year – RM 2,044
      3 year – 15th year _ RM 2,102.00
      16th – 20th year – RM 2,023.00
      Subsequent year – RM 1,969.00

      Due to overall BLR reduction at the current time ( BLR 5.55%) my current monthly 3 rd year installment amounts to RM 1,865.00

      Could please comments on the following :

      On my June 2009 appeal for the reduction of mortgage loan rate , bank has responded by the following as :
      to the outstanding amount of RM301,544.85 as at June 2009 and remaining tenure of 319 months :
      Interest rate : First 24 months BLR -0.7% ( Amount per installment RM1,684.00)
      Thereafter RM1,474.00
      I have been reading through your post titled ” Beware of the Lock-in Period of your Home Loan Offer Letter”

      where the main conclusions were summarized in another post

      Dear KCLAU ,
      Except those highlighted points in those posts , which ones shall be considered thoroughly or renegotiated regarding my particular case :
      1. What do you think on new offer , at my opinion rates structure may be acceptable ?
      2. at what other crucial points shall be my response to be focused ?

      Thank you in advance for any valuable suggestion generated .

      Best regards,


      • KCLau

        Hi Amakash,

        There are offers of BLR-2.0 or more for the whole tenure at this moment.
        1. Try appeal again to get the offer compatible to other bank
        2. You can also talk to mortgage officer from other banks to see what is the offer they can provide.

    • Evie

      Dear KC,

      In addition to my earlier message, fyi my house loan has been fully paid since last early of last year. I am prompt in paying 2 of my credit cards. I was not aware of the lapse amt until HSBC advice.

    • Evie

      Hello KC,

      I am trying to refinance my home for RM100K frm HSBC. The refinance amt is just 50% of the current market value. My application was rejected. The reason given by HSBC was i have a 1 month lapse (actually less than a month) of car loan not paid thus has affected my application. They ask me to resubmit my application again in probably 6 months time or 1 year. Is there any other way that I can overcome this issue. Will it also affect if I tried with other bank for refinance ?

      Wld appreciate if you advise what shld i do next.

      Thank you.

    • Visva

      Hello KC,
      I just got an offer from HSBC Flexi Loan(1st.yr BLR-2.5%,2nd BLR-1.75%,3rd yr onwards BLR-2.1%).This package is NZEC.Their ZEC rate is higher than the other banks.
      This is 3yrs Lock-In.One thing concerns me is that the Penalty is too high.They charge admin fees 1200 + 3.5% from the Total Loan amount.This is outrageaously high compared to other banks.
      Since I have a current account HSBC for the last 5yrs and using their Credit Card for the last 13yrs and bought an Insurance policy 300K with them some 7yrs back,I tried to nego for better rate and less penalty rate but they are refusing to consider.I got disappointed with the Branch Manager and their shallow consideration for the existing clients.Since I’m footing the legal fees, surely they can consider a better rate and penalty clause to be amended..
      So, now do you think I can still have a room to nego at their HQ in KL ?Is there are any other Banks offers better package?I’m considering Std Chart and OCBC.If their offer is good, then I would want to close all my accounts with HSBC and move my assets to other banks.A very bad customer Service by HSBC Management .
      Pls offer your advice .Thanking you in advance.

      • KCLau

        Hi Visva,

        You can try other banks. If they offer better package, you can always go back to HSBC to ask for a counter-offer.
        I like HSBC because of their efficiency and good customer service.

        • poh lin

          i face the same issues with HSBC bank, they are very rigid when comes to negotiation especially to their existing customers. i tried to ask HSBC to waive the service charge of RM10 every month but they refused, the bank is also charging RM1 monthly for sms service which i never rec’d after changing my mobile no, and have since asked them to cancel this unnecessary sms service but to my disappointment, i still receive the charge until today.

          the offer HSBC is giving after my 5 yrs lock in period is not attractive at all BLR-1.75%, after appealing to the “Management”, they offered BLR-1.8% with another 5yr s lock in period. imagine how they are treating to their existing customers! when i called up Citibank, over the phone, they give a BLR-2.1% with lots of other atrractive promo, and the rate is still negotiable. in fact, if u put in some time and effort, you may be able to find out more better deals. So far, HSBC is the worst of all comparing the rates offered by other banks.

          i m considering to change from hsbc to standard chartered now.

      • SYW

        Hi there, I think your problem is what exactly what I’m facing right now with HSBC Branch in JB,except mine is just too late for me to consider changing my loan. I deeply regret getting my loan from them as a lot of items are not informed or said but taken back,worse still my loan was process supposed by a account manager. First they value yr house this amt then after 3mths later they state that the house is not worth this amt even though I’ve already sign the Letter Of Offer! Then they state no need valuation fees then all of a sudden after everything is done someone came asking for valuation fees charges which was higher than most bank. Also if u sign for their offer of -BLR 2.2% throughout yr loan period, u MUST but MRTA from them,if not then u are not entitled for that BLR 2.2%. (This wasn’t told in the begining,only after u sign the LO). Also most their etc charges are higher, so I would advise to try out other banks which I know give better services & value for housing loan. Don’t be a fool like me get stuck with HSBC just because I was also their bank customer for more than 20years so thinking that probably will get better services. Hope this could be of help in yr choice of which bank.

    • Sam

      Just got a proposal from Standard Charted Bank.

      >MOA Finance Entry Cost Package
      >Loan amount above RM300,000.00 @ BLR – 2.35% without MRTA
      >Loan amount above RM300,000.00 @ BLR – 2.40% with MRTA
      >Lock in period 5 years
      > 3% penalty of total loan amount for early settlement

      What do you think of this proposal?

    • Sam

      I am considering to refinance my property. Currently, I have a home loan with HLB.

      * After lock in period
      * Outstanding loan amount @ RM317,000.00 (with MRTA)
      * Monthly installment @ RM2309.00
      * Property market value @ RM550,000.00

      Requested lower rate from HLB and they have approved by offering BLR -2.00% (whole tenure) with 5 yrs lock in period. 5% penalty for early settlement within the lock in period. I think the bank a bit too harsh on this!

      Another one from OCBC, they have offering BLR-2.4% (whole tenure) with 5 yrs lock in period. MRTA is optional. NON Zero moving cost. 3% of loan amount OR RM5K penalty whichever is higher for early settlement. Please advise.

      Thank you.

      • KCLau

        @ Sam

        Oh man … the HLB 5% penalty for early settlement is too much.
        OCBC offer seems reasonable.

    • BrianNg

      @ KCLau

      I actually had approached 4 banks branches nearby my house.
      The highest I can get then was BLR-2% for the whole tenure
      by HLB or PBB. They told me that because the amount I wish to
      borrow is less than 200k or 250k, therefore the highest they can
      offer were this rate. I would actually prefer PBB ior HLB over
      the other local banks. No idea though on the rest foreign banks.

      The other banks I had approached were CIMB and Alliance, but the
      offer i got from them were less appealing comparing to the one I’ve
      mentioned on top.

    • BrianNg

      Need your advise on whether i should refinance.
      Currently i am having 1 home loan.

      1. Standard C. bank
      -still under lock in period, currently in third year (loan started from Jan 2006)
      -loan amt RM169000 (including MRTA)
      -now paying at rm1035 (blr+0.38%)
      (1st year – 3.70%, 2nd year – blr + 0%, 3rd year – blr + 0.38%)
      -property market value – rm240k – 250k

      I approached HLB agent , and this was her offer.
      – 5 years lock in
      – BLR – 2% for tenure of 30 years

      Apart from that, I’ve some debts with credit cards due to the
      furniture and renovation fees. Therefore now
      I wish to consolidate them into this loan so that I can avoid
      paying higher interest for the credit card.

      So the final loan structure would be like below:
      Outstanding amount: 163k
      Penalty: 3% of Original169k = 5.1k
      MRTA: Another 5k for 2 persons(Is this expensive)?
      Others: Another 10k for me to service the credit card debt.

      My questions are:
      1. Is the new package competitve enough compare with others
      available in the market.

      2. Should i refinance?

      3. Can you tell me or list out what other fees that are possible need to pay
      out if i opt for the new package beside the loan and MRTA?
      As far as i concern, I was informed when I had approached them during last visit.
      a) Penalty
      b) Legal Fee, Stamp Duty
      c) Valuation Fee
      d) Monthly maintenance fee(RM10)
      e) One time setup fee(RM200)

      4. How to know ZEC or NZEC which one is better?

      Thank you!

      • KCLau

        @ Brian Ng,

        1. I think you may be able find offer better than BLR-2%. Try Public Bank.
        2. It make sense to refinance because you can settle your credit card debt much earlier.
        3. You can save on the new MRTA. Just ask your Standard C. officer to help assign it to your new mortgage providers.
        4. For better cash flow, go for ZEC.

    • paun

      i need & interested to do a refinance for my “personal loan”. Do you have any recommend and suggestion on : how & which bank give the best offer ? im currently using Aliance bank.

      • KCLau

        @ Paun,

        Talk to at least 3 bankers. I bet you will learn a lot in the process.

    • TG

      Dear KC,

      Been reading your “Money Tips” book and finding it great. Are there still banks giving 3 year lock in period? So far

      Alliance, Maybank, CIMB, OCBC, EON, Ambank all imposing 5 years lock in.

      I haven’t tried the bigger international ones like HSBC and CITI because they are too far away to make payments and I don’t have the advantage of constant online access (I frequent Cyber cafes). What is the drawback of having a longer lock-in period other than not being able to take advantage of deals that come along the way?

      Also, Between zero moving cost and non-zero moving cost, I have been calculating and there is a rough 1k difference in the final value. Which has the potential to incur more interest? Some banks offer to include the non-zero moving costs (i.e. the legal, valuation).

      BTW, I’m taking a 30 yr loan with a 10 yr MRTA which comes up to RM 6320 in extra costs on top of my loan amount (which I intend to pay up front to not incur any interest). The package I’m considering is a non-zero moving cost type. If I consider the zero moving cost, I’ll pay roughly an extra RM 20 in premiums per month, which comes to about RM 7200 in total after 30 years. I don’t see the benefit in taking a zero moving cost option.

      Hope to pick your brain on this. Thanks in advance.

      To Caryn,
      The bank which is offering you -2.3%, -2.05% is good. Which bank is it? Mine is only giving me -2.2%, -2%. It could be your loan is >200k, thus the extra deduction in %.

      • KCLau


        HSBC provides 3 years lock-in package. Normally, if you choose Zero-Moving-Cost (ZMC) package, banks will charge a bit higher interest rate. I know that banks pay the lawyer less compared to if we are going to pay the lawyer directly. If you want to compare the real cost involved between ZMC and Non-ZMC, you will need to use financial calculator. Simply comparing the end result of the total difference is not really a fair comparison – thinking of paying RM2000 upfront, or pay extra RM50/month for 5 years. Which is better? You would need a financial calculator to really calculate the rate of return. Which one is worth it? It is also different between you and me. Let’s say the rate of return you calculated is 7%. I may think that 7% is not high, and I would choose ZMC, so that I still keep the lawyer fees which is supposed to be paid upfront. As long as I can generate >7% return on that money, I am winning here. But for someone who is going to put the money in FD anyway, 7% is worth paying upfront.

        BTW, I always choose the ZMC package. I like to keep the money with me.

        For MRTA, I don’t buy from banks. I would recommend that you top up your own life insurance. You will get more flexibility and probably pay less in premium. Talk to a life insurance agent to find out how.

    • ckreds

      I am considering refinancing,

      currently i am having 2 home loans.
      1. Affin bank
      -after lock in period (loan started from 2002)
      -loan amt RM73948 (including MRTA – RM1948)
      -now paying at around RM490 (blr+0.65%) per month
      (1st year – 3%, 2nd year – blr-0.5%, there after – blr+0.65%)
      -property market value -rm120k

      2. Standard C. bank
      -still under lock in period (loan started from 2005)
      -loan amt RM101732 (including MRTA – RM1732)
      -now paying at rm668 (blr+0.38%)
      (1st year – 3.50%, 2nd year – blr + 0%, 3rd year – blr + 0.38%)
      -property market value – rm240k – 250k

      now Hong Leong offering this package.
      -1st year – 2.88%
      -2nd year – 3.88%
      -there after – blr-1.2%
      – 5 years lock in

      my plan is to do refinancing for Standard C. bank for rm175000( loan amt 170000 + penalty 3000 + MRTA 2000)
      So, every month,
      – 1st year rm726
      – 2nd year rm823
      – 3rd year rm971

      Obviously after refinancing, it does provide some positive cash flow, but my questions are:

      1. Is the package offered by Hong Leong a good package? (compared to currently available n market)

      2. If im considering to do refinancing again after the lock in period, does this package look better?

      3. For MRTA, im planning to go for 15 years only, is it save? (covering 100% for myself and wife)

      4. Hong Leong bank will settle the outstanding amount in Standard C. bank(rm100k) and for the extra rm70k, i will do an early settlement for Affin bank, is it OK for this plan?

      Many Thanks!

      • KCLau

        Hi ckreds,

        About your questions:
        1. Hong Leong’s package is very competitive. I can’t say that it is the best because I didn’t compare all the banks.
        2. You can pretty much do anything after the lock in period. I think nowadays, there are package that lock only for 2-3 years. HSBC offers one on 3yrs lock in, due to the low interest rate.
        3. You can choose not to MRTA if you want. There is no ruling that you must buy MRTA from the bank. You can use your own insurance policy to cover the liability. But some bank do offer better rate if you take up MRTA at the same time. There is a way to work around it – buy only 5 years MRTA. You should know whether it is worth it.
        4. Consolidating your loan (two become one) as you plan will save some interest charges because the more you borrow, the better rate you are offered. Another thing to consider is the tax issue. If your renting out the property on Affin Bank loan, the interest can be calculated to reduce your net rental income.

        Happy CNY!

    • Peter Lim

      Read the offer letter. How can we know without reading the offer letter?

    • Caryn Chiang

      Hi, I just receive two proposal from two different
      banks. One bank propose BLR -1.75% for whole tenure. The second bank propose 1st 2 years -2.30% thereafter BLR -2.05%. Lock in period 5 years for both banks. I found the proposal from the second bank too good to miss. What do you say?

      • KCLau

        @ Caryn,

        The second offer is definitely better. But I wonder why is there such big differences between two offers?
        Is it zero moving cost?

    • Financing Owner

      mortgage loan installment for five years, which is the lock in period practiced by bank at this moment. It is a simple strategy to always refinance your home loan after the lock in period

    • Helen

      I found this website useful when I wanted to know some quick informations about the reasons why to refinance. I think now it is the time for that.

    • […] you looking for information about home loan? Read my other related article: Refinancing Home Loan: Save Mortgage Interest Beware of the Lock-in Period of your Home Loan Offer Letter How to Settle Your Loans Earlier […]

    • kclau

      Thanks for visiting my blog, Tom.

    • Tom Allen

      A lot of people who took out their mortgages a number of years ago may not be getting the best deal possible. I think that probably the tow most significant changes in the industry in this regard in recent years.

      I certainly feel that refinancing can be a great idea as long as people understand the process and the potential pitfalls. It never ceases to amaze me how a lot of people don’t understand the details of what is the single largest financial undertaking for most people.

      I run a mortgage information site and I always try to explain clearly to give people a better understanding of what’s available out there.

    • […] articles: Refinancing Home Loan: Save Mortgage Interest Cash on Cash Return vs […]

    • Home Loan FAQ

      […] KCLau’s Money Tips A Malaysian compiling Lots of tips and advices on personal financial planning – Protect, accumulate, preserve, and manage your WEALTH wisely! « Refinancing Home Loan: Save Mortgage Interest […]

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