New Movement in BLR

New Movement in BLR (Base Lending Rates).
*BLR HAS BEEN REVISED, IT HAS INCREASED
FROM 6.6% - 6.85% SINCE JULY 2014!
INTRODUCTION
A. Bank Negara Malaysia has raised its "Overnight Policy Rate" (OPR) by 25 basis points (bps)
from 3.00% to 3.25% effective from 16th JULY 2014. Due to this adjustment, a number of
banks will raise their Base Lending Rates (BLR) or Base Financing Rates (BFR) in tandem
with this announcement. As a result, BLR will be adjusted to 6.85% from 6.60% p.a.
B. This is going to affect most borrowers today who are currently servicing their housing
loans. Any BLR changes will definitely affect the “Performance of Your Loans Repayment”;
either when the BLR increases or decreases accordingly.
C.
BLR Planning & Management (BPM) is now becoming an important “Loans Planning Tool”
for us today. As a wise borrower, it is always beneficial if we could manage the BLR better,
we shall capitalize it as an opportunity rather than a threat to the borrowers.
D. Technically, BLR is a key parameter to calculate your housing loans as it will determine the
“Length of Tenure & Amount of Monthly Installment”. Although BNM does not adjust it
on a regular basis, but the fact is it does change “Once or Twice” yearly or biyearly.
BPM applies well on flexible or linked typed loans account for discipline borrowers who know
how to use its advantages to complete their housing loans. Hence, BPM enables you to
complete your loans as planned or even ahead of schedule………..
Prepared by Alan Lim, Prudential Premier Wealth Planner.
AUG.2014
New Movement in BLR (Base Lending Rates).
CASE STUDY
E)
As a case study, let's review & study BLR in greater details here.
*Assuming you subscribed to new loans before BLR changed to 6.85% as below:
I. Outstanding:
= 500K.
II. BLR:
= 6.60%.
III. Discount:
= 2.40%.
IV. Effective Rate:
= 4.20%.
V. Agreed monthly instalment:
= RM 2,445.
VI. Agreed loans tenure:
= 30 years/360 months.
When all parameters are the same,
except the effective rate!
I.
Outstanding:
= 500K.
II.
BLR:
= 6.85%.
III.
Discount:
= 2.40%.
IV.
Effective Rate:
= 4.45%.
V.
Agreed monthly instalment:
= RM 2,519.
VI.
Agreed loans tenure:
= 30 years/360 months.
This Area is Left Blank Intentionally!
Prepared by Alan Lim, Prudential Premier Wealth Planner.
AUG.2014
New Movement in BLR (Base Lending Rates).
CONCLUSION
except the effective rate!
F) It meant an additional RM 74/Month, RM 888/Year & RM26,640/30 years.
*What if today BLR increased by 0.5%, 0.75% or even more?
*We will be always on the lost side if we have overlooked especially today
our loan amounts are huge & substantial. It surely triggers negative impacts.
G) Instead of wait & see, we must learn how to “Save More Time & Money”.
Any savings derived from good loans planning will make a lot of differences in the
medium to long run. Hence, compressing the loans is the only way going forward.
H) To conclude, we can manage it effectively. The potential savings in terms of time & money are
significant; borrowers could aim to save 15-30% or more after a proper study & analysis.
For more information, you may refer to my link as below:
http://www.qaswealthplanners.com/pages/BLRMLTAPlanningManagement.aspx
Prepared by Alan Lim Wai Loong
RFP, Registered Financial Planner
Premier Wealth Planner | MDRT | Certified Trainer
Master Degree, Uni of Warwick, UK
Prudential Assurance Malaysia Berhad
M: 019-2260030 | O: 03-76663880
www.qaswealthplanners.com
"Save & Invest Wisely"
Prepared by Alan Lim, Prudential Premier Wealth Planner.
AUG.2014

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