3 Main Reasons for Home Loan Refinancing

Previously, I wondered why people do refinancing of their home. Doesn’t it mean they are actually delaying the tenure of your debt? Or in other words you are raising your owing money from the bankers? Yup, was that short minded and totally discourage to proceed with refinancing with this belief, but that change after my other half explain to me what that means..

I understand that...

Refinancing of your current housing loans means you are taking advantage on the current lower finance charges compared to the one you are having.

Looking back at the history, over the last 5 years, average loan interest was BLR + 0.5%. Currently, most of the Malaysian Bank is offering as low as BLR/BFR – 2.3%. Current BLR stood at 6.3% and mind you it is predicted to be revised upwards very soon. I guess before it does happen, grab the opportunity of the current low interest rates for the following reasons:

1.       To maintain monthly payment  that will results in reduced of loan tenure

2.       To maintain loan tenure that will result in lower monthly payment

3.       To maintain monthly payment and loan tenure that will result in excess cash

Still don’t see how the above is at your preferences? I’ll share with you case example  of each so you could see the differences before and after the refinancing..