Case Example of Home Loan Refinancing

Hi folks..sorry for taking quite some time to continue my previous entry..well things came out that I got to postpone my intention to continue writing.

So lets go straight to the point..last time I promised to share with you case example of each reasons for refinancing right? Here we go..

 

Lets make a reference on the following:

     Your current housing loan is fixed at RM 400,000

             Loan tenure of 30 years
            Your current loan interest rate is BLR + 0.5 = 6.3 + 0.5 = 6.8%
            Your refinance interest rate is BLR – 2.3 = 6.3 – 2.3 = 4%

Case example 1: Maintain monthly payment will result in reduce of loan tenure

 

With the lower interest rate, you can actually reduce loan tenure from 30 years to only 18 years by maintaining the same monthly payment to the bank.  Let’s see the calculation I made below: 

Now what does it mean? It means,  saving of 12 years loan tenure by maintaining the same monthly payment easily can save RM 2,600 x 12 months x 12 years = RM 374,400!

 

Case example 2: Maintain loan tenure will result in lower monthly payment

With the lower interest rate, you can actually reduce your monthly payment from RM 2,600 to RM 1,900 by having the same period on loan tenure. Let’s see the calculation I made below:

Now, what does it mean? It means that..you are saving RM700 monthly, and that my friend also means that you can afford to purchase another medium cost apartment for rental purposes which turn to be an additional income for you!

 

Case example 3: Maintain monthly payment & loan tenure will result in excess cash

With the lower interest rate, you can have up to RM146, 000 excess in cash by refinancing with the same monthly payment & loan tenure. Let’s see the calculation I made below:

Now, do I need to elaborate in details on the usage of the money? ;).

So folks, in any scenario, refinancing is the best option that we have. What are you waiting for?