A new Base Rate (BR) system has been taking effect since January 2015 replacing the old Base Lending Rate (BLR) structure which the banks in Malaysia can now determine their interest rate based on the benchmark cost of funds and Statutory Reserve Requirement (SRR), without intervention by the central bank, and should differ from bank to bank depending on their own efficiency in lending.
This new framework will give better transparency from banks and to have minimum impact on consumers. For example, based on the previous BLR rate of 6.85%, Maybank was offering “BLR -2.40%” to the borrowers. This means that the customer pays 4.45% on the mortgage.
With the BR system, Maybank will have to reveal its base rate and also disclose its margin, which will determine the Effective Lending Rate (ELR). Maybank has set its BR at 3.20%. Here, interest is presented as “BR+1.35%”, which means that the effective rate that the customer will have to pay on the mortgage is 4.55%.
Example:
| Loan Amount: RM 1,000,000 (No lock-in period) | ||
| Loan tenure: 30 years | ||
| Base Lending Rate (BLR) | Base Rate (BR) | |
| Reference Rate | 6.85 | 3.20 |
| Interest Rale | -2.40% | +1.35 |
| Effective Lending Rate | 4.45% | 4.55% |
| Monthly instalment | RM 5,037.19 | RM 5,096.61 |
| * Effective Lending Rate may vary if BLR or BR changed. | ||
The following are the list of Malaysia bank fixed-rate home loan interest rates:
(Updated in August 2016)
