Malaysia Home Loans - What's New (September, 2008)

The much anticipated rise in mortgage lending rates has not happened as predicted and the Overnight Policy Rate remains at 3.5%, and Base Lending Rate for the time being, stays at 6.75%. However pundits maintain that an interest rates increase in the third quarter of 2008 is likely.

Regardless of the eventual movement in OPR, Malaysian lenders continue to compete, and September saw the launching new “discounted” home loan packages and some with innovative features.

For quite a long time, HSBC watched as Malaysian Banks slashed rates. Now the “world’s local bank” with a long history and reputation of service excellence, finally introduces a number of “winning” home loans. If you are not fussy about its 7-year lock-in, then check out HSBC’s Home Smart value Plan (Non Free Moving Cost, No MRTA) which starts with a first year rate of BLR-2.25%, followed by BLR-1.75% (years 2-5) and then BLR-1.95% from the sixth year onwards.

The bonus is that the said package comes with “flexi” features, allowing prepayments and withdrawals.

However, the attractive rates apply provided the Letter of Offer is accepted within 3 days of issuance, which is fair enough.

As far as Refinancing is concerned, smart money is with HSBC’s Home Smart Refinancing (min RM RM250,000) that starts with BLR-2.35% and ends with BLR-2% (years 2-5 interest rates vary depending on the loan amount). This is without a doubt the star amongst all refinancing packages out there…and as said earlier…delivered with a healthy dose of top-notch service.

Unconfirmed reports from borrowers seem to indicate that for existing HSBC clients and for those with good credit credentials, HSBC may even do better than the published rates! See the rest of HSBC’s new loans.


ING went off the lending activity radar for a while but is now back with a vengeance, determined to reclaim the mantle of the “lowest fixed rates”. ING is now offering Non-Free Moving Cost loans with rates fixed at 5.85% (margin of below 80%) and 5.95% (80%-90% margin).

Regardless of whether interest rates are likely to increase in the short or long term, a fixed rate of 5.85% is always a good bet as it provides certainty for borrowers and a peace of mind. (click here to see how much more interests is charged as rates go up)

For its FREE MOVING COST package, ING is offering 6.25% (below 80% margin) and 6.35% (80%-90% margin).

The rates apply for properties that are completed as well as those under-construction. Insurance/MRTA is compulsory **

A point to note: ING will not consider applicants with more than 4 credit cards.

For certain ING will not be offering this special low fixed rate for much longer and the loan package offer closes end September 2008. So hurry!

** Note: What if you like the low fixed rate BUT do not like to the compulsory Insurance/MRTA? Although it is not official news, AIA Mortgage with fixed rates of 5.99% (0.05% higher than ING’s…plus change) has on a number of occasions waived its requirement for insurance.


Bank Simpanan Nasional enters the fray packing a mighty punch with its 5.99% Islamic Fixed Rate (BSN Mortgage Bonanza). Although fixed rates have previously been offered by insurance lenders such as AIA and ING and Islamic Banks, BSN is the first Bank to offer an Islamic financing with such a low fixed rate.

The financing offer is only applicable to completed properties, up to 90% margin of financing. Minimum loan is set at RM200,000

As with any Islamic financing , enjoy a 20% discount off the stamp duty for new purchases, and also a Takaful policy that covers even ‘Acts of God’.

The challenge is to locate one of only 13 branches that do housing loans. For further information, click here and your enquiries will be directed to the relevant BSN branch.


Whilst “deposit-linked” loans are quite common these days, Alliance Islamic has on offer an Islamic Deposit-Linked Financing…with a good twist!

While a normal Savelink (deposit-linked) loan allows you to offset the amount you keep in deposit against the loan principal, the deposit-linked- account DOES NOT pay you any interest per se.

Alliance Islamic Flexi is a deposit-linked account that NOT ONLY saves you interest by offsetting the deposit sum against the financing sum…IT ALSO PAYS YOU A “PROFIT RATE”. After all, why have your cake if you can’t eat it.

In addition, the one-time set up fee of RM200 applicable on normal Savelink is also not applicable with the Islamic Flexi.

Other goodies include:
-Financing tenure of 35 years or up to age 65, whichever is earlier
-Maximum financing of 90% of purchase price
-Option to include MRTA and stamp duty into financing (+ additional 5%)
-Option to choose Zero Entry Cost (ZEC)/ Financed Entry Cost (FEC) Package) on daily rest calculation
-Rate protection with capped ceiling rate at 9.9%
-No stamp duty for refinancing from conventional loan
-20% discount on stamp duty for new purchase
-For completed and Under Construction properties and for landed & Non-landed
See Alliance Islamic Financing Rates here…


Bank Islam continues to impress with its Baiti Cakna, offering 100% financing for both completed and under-construction properties. The margin of 100% is only for properties on Bank Islam’s panel of developers . Interest rate for properties under construction is 2% in year 1; 4% in year 2 and BFR-1.3% to BFR-1.8% thereafter (non Zero Entry). For completed properties, year 1 interest rate is 3% and 5% for year 2. See Bank Islam Loans


More good news follow. OCBC has reintroduced their “Hybrid Loans” ie fixed for a few years and then float, and it is a very good one! At the time of this writing OCBC has not made public the rates but we understand it is ridiculously low fixed rate in the first 3 years, and then followed by up to BLR-2% from year 6 onwards. How low is the rate? Ask OCBC here.

While it is a normal term loan, loan prepayment and over the counter withdrawals are allowed.

Another bonus from OCBC is that while a lot of lenders look at total commitment (including other debts, credit cards, hire purchase etc) OCBC’s credit assessment focuses on the repayment amount of the OCBC loan you are applying to as a ratio of your declared income. Translated, it means that technically it is “easier” to qualify for approval, although by no means does that imply that the Bank compromises on quality.


Finally, MAA Mortgage with its unique 100-year revolving loans (Long Life Loan) has revised its rates to KLIBOR[3.69%] + 3.15% = 6.84%. With a minimum loan of RM222,000 for landed properties and RM300,000 for non-landed properties, MCL remains the only loan that caters for borrowers over 65 years of age.

MAA’s financial planners also feel that with 100 year loan, borrowers can manage their retirement years cash flow better and have cash-at-call (withdrawal facilities are available) without having to sell their homes to fund retirement expenses.

In addition, MAA recently launched 2 new packages (MHF) with KLIBOR + 1.89% for completed and under-construction properties above RM225,000 and KLIBOR + 2.39% for properties under RM225,000. Unlike “Long-Life” MHF does not come with a revolving credit component and it’s a straight out term loan albeit with a maximum term of 45 years or until 80 years of age.

Special promotion: Zero Entry Cost loans are available at MAA at same rates provided applications are received before 31st March 2009. To apply/enquire, click here