In Real Estate Investment

What is Basic Lending Rate? BLR

Before 2015, banks effective lending rate is referred to this “Basic Lending Rate” that set by National Bank of Malaysia (Bank Negara). New house buyer will look for a mortgage from bank and banker will rate their effective loan rate based on this Basic Lending Rate with a discount %. For example, if a bank offers 4% and the BLR at that time is 6%, then the bank actually absorbs the differences (2%). This discount of loan rate difference is where the banks are competing, hence, you may be able to get 3.8% from bank A and 4.1 from bank B. Bank B may offer some other flexibility in the loan. The bank structure the loan to offer to their potential new house mortgage loan. More common in Malaysia, a buyer of new house from new project will get cheaper loan rate.

What is Base Rate?

Base Rate is introduced by Bank Negara and the effectively replace the BLR. Don’t get confused. Below is a screenshot I get from Bank Negara website. Hope that able to clarify things.

Buying 350K Ringgit house

 

As you can see from above illustration, the monthly instalment will still be the same, either BLR or BR is being implemented. I have tried to research for the best indicative effective lending rate. Below is a bank negara rates, and Maybank has the best rate. This table is created on 5th September 2017.

 

Malaysia financial instituition mortage ratesource: Bank negara link

We hope the information above will able to give you some pointer about what to consider before buying a house in Malaysia. What do you think? Like, share & comment your thoughts. Subscribe for latest updates.

 

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