A Comprehensive Guide On House Loan Interest Rate 2023

Kali terakhir diperbaharui August 1, 2023 oleh Shafiq Wahab
A Comprehensive Guide On House Loan Interest Rate 2023

First-time home buyers often find the process of purchasing and owning a house confusing and overwhelming due to numerous steps involved, from making an offer to finally getting the keys. One of them would be the house loan interest rate. It is an amount a bank charges you for using their money and is often displayed in a percentage value.

Best Housing Loan Rate in Malaysia 2023

The interest rate depends on two factors: the bank’s Base Lending Rate (BLR), influenced by Bank Negara Malaysia’s Overnight Policy Rate (OPR), and the spread, covering the bank’s operating costs and profit margins.

Generally, home loan interest or profit rates among banks remain relatively close. For instance, Maybank offers a low home loan profit rate of 2.88% p.a., while another bank might provide 2.90% p.a. or 2.95% p.a.

Despite the seemingly small percentage difference, over 30 years, even a 0.01% variance can result in tens of thousands of Ringgit in interest or profit. Hence, it’s essential to seek the lowest possible interest or profit rate available to you.

Home Loan Interest Rate 2023

The following is the schedule of home loan interest rates for 2023 (subject to change) for your guidance and reference:

Bank Home Loan Interest Rate (%)
Bank Rakyat 3.18
Maybank 2.88
Public Bank 3.10
CIMB 3.80
Bank Islam 3.32
AmBank 3.25
Bank Simpanan Nasional (BSN) 3.10
RHB 3.60
Alliance Bank 3.51
Hong Leong Bank 4.75
Citibank 3.20
Affin Bank 3.51
HSBC Bank 3.74
Standard Chartered 4.50
Bank of China 2.85
OCBC Bank 3.45
MBSB Bank 3.10
UOB Bank 3.24
Bank Muamalat 3.86

Calculation Example of House Loan Interest Rate

The following is an example calculation of house loan interest rate for your reference:

Base Rate (BR) + 1.25% = XX%

Each bank in Malaysia has a different base rate (BR). For example, if you apply a home loan with Maybank, assuming Maybank’s BR rate is 1.75 percent.

Maybank Base Rate (BR) 1.75% + 1.25% = 3%

Therefore, the annual interest rate for your home loan is 3 percent. If your home loan is RM380,000 with a loan duration of 35 years, this means you need to pay a monthly installment of RM1,464.

RM380,000 x 3% = RM11,400 (Annual Interest Amount)

RM11,400/12 month = RM950

This means that out of the monthly payment of RM1,464, RM950 is allocated for the interest while the remaining balance of RM514 is deducted from the principal.

Note: The calculation is an estimate only, the actual calculation may differ depending on the type of bank/financial institution you have.

House Loan Interest Rate in Malaysia

Compare House Loan Interest Rate Wisely to Plan Your Expenditure

Comparing house loan interest rates is a crucial step in finding the most suitable loan for your needs. Here’s a step-by-step guide on how to do it:

1. Research Different Lenders

Start by researching and identifying various lenders that offer home loans in your area. Look at both banks and non-banking financial institutions.

2. Check Current Interest Rates

Visit the websites of the lenders you shortlisted and check their current home loan interest rates. Note down the rates offered for different loan products.

3. Review Special Offers

Some lenders may offer promotional interest rates for a limited period. Check if any special offers are available and how long they apply.

4. Compare Additional Features

Look beyond interest rates and assess other features of the loan, such as prepayment options, foreclosure charges, flexibility to switch interest rate types, and customer service.

5. Read Customer Reviews

Look for reviews and feedback from other borrowers who have taken loans from the lenders you are considering. This can provide insights into the lender’s reputation and customer service.

6. Seek Professional Advice

If you find the comparison overwhelming or need assistance, consider consulting a financial advisor who can guide you through the process and help you make an informed decision.

House Loan Interest Rate in Malaysia

4 Factors Affecting House Loan Interest Rate in Malaysia

Generally, the house loan interest rates are different according to banks, however it is also influenced by other factors such as:

1. Type of Home Loan

As a home loan borrower, you’ve encountered terms like fixed, floating, and mixed interest rates. Fixed rates remain constant, while floating rates fluctuate with the market. Mixed rates start fixed and later switch to floating. Due to higher risk, banks may charge a premium on fixed and mixed interest rates.

2. Loan Duration and Amount

Opting for a shorter loan tenure can lead to lower interest rates, while a longer tenure may result in higher rates. Additionally, the loan amount can influence rates; higher amounts may incur higher interest due to perceived risk. In addition, making a substantial down payment is a smart way to reduce home loan rates.

3. Credit Score

Your house loan interest rates are greatly influenced by your credit score, reflecting your repayment history, financial habits, and creditworthiness. A lower score indicates higher credit risk, resulting in higher interest charges by lenders. Conversely, a higher credit score signals lower risk, leading to more favourable, lower interest rates from lenders.

4. Location and Value of Property

The location and value of your house are crucial in determining your interest rates. If the property is situated in a low-profile neighbourhood with limited amenities and subpar construction, the reduced resale value could lead to higher home loan rates charged by the lender.

House Loan Interest Rate in Malaysia

Secure an Ideal House Loan With Affordable Interest Rates!

As the real estate and financial landscapes continue to evolve, you must stay informed about the latest trends and updates in the housing market is essential for making prudent financial decisions.

By seeking the lowest possible interest rate tailored to your needs, you can secure a more affordable and manageable home loan. Hence, you must understand the factors that influence interest rates, such as credit scores, loan tenure, and property location, empowers borrowers to make informed decisions that align with your financial goals.

We hope that this sharing can help you if you are looking for ideal house loan with affordable interest rate. Additionally, if you are considering the best and comprehensive home insurance for you, you may visit the Qoala website for more information.

Qoala is an insurance platform in Malaysia that provides various types of insurance such as car insurancemotorcycle insurance, and medical insurance with a guarantee of a safe, affordable, and easy insurance buying process.

About Writer
Syazwani Yahya
As a proud tourism graduate turned content writer, I've taken my love for writing and combined it with my passion for educating others about finance and insurance.

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