Just take an example as below, 500,000 loan, BLR-2.4%, loan tenure 35 years, and BLR as 6.6%.
Following the example below, for every 1% of BLR increase, there is an increment of 13% in monthly installment. However, the increment magnitude of the monthly installment is also subject to the loan tenure that you have taken.
Secondly, many folks are thinking that even if the BLR is raised, the bank still will maintain its monthly installment by extending the loan repayment period. Yes, the bank may allow that, provided the new monthly interest charge (after BLR raised) is still lower than your original monthly installment, and the extended period shall not exceed the maximum loan period allowed by Bank Negara Malaysia (BNM). Looking at the example below, with 2% of BLR raised, the new monthly interest charge has exceeded the original monthly installment, hence the bank will have to revise the loan monthly installment accordingly to ensure there is sufficient portion to pay off the loan principle.
How much will the raised BLR impact your pocket? Check it out using the link below for your own case.
House Loan Calculator
