BLR increase soon?

Written on 9:40 AM by Yuen Lung

 

This is definitely another bad news to people who are still serving housing loan with interest rate that is based on BLR.

For example if you are servicing a housing loan of RM300K, 30 years, interest rate at 6.75%. The monthly instalment should be RM1945.79 per month. If the interest rate increase by 1%. the monthly instalment will become RM2149.24 per month. Yes, it is increased by RM203.45 per month or RM73240 extra over 30years! Therefore, people who are taking housing loan that based on BLR will be in greater debt.

There are something that worth considering for people mentioned above.

1. Take fixed rate housing loan. This is to prevent monthly instalment for housing loan sky jet when BLR increased. However you need to re-look into the loan IF BLR happen to decrease.

2. Look into mortgage reduction service available. Get your loan in shape, take action (such as prepayment) and monitor it closely.

3. Consult financial planner.

4. Last but not lease, if you really cannot afford the monthly instalment, you might want to sell it (if you are not staying in the house) or down grade to smaller units. This is to avoid you fall into bigger financial problem.

Any other suggestion?

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