Malaysia Home Loan Comparison: A how-to guide

1. Do you need a new home loan or refinancing?

If you are looking at taking up a new home loan, what is the quantum loan amount do you need? If you need more than 80% loan, EON bank can lend up to 90% loan.

If you would like to refinance your current home loan, you would need to check if you are still locked in to your current bank. The best option to refinance is 2 or 3 months before your lock-in period expires. This would give you time to send in your cancellation form to your current bank and avoid prepayment penalties should you refinance before lock-in period is over. You should also be aware of the exit penalty fees involved, which can amount up to 2% of the loan amount.

2. What type of rates would you feel most comfortable with?

Choose between conventional and flexi packages.

Conventional home loan consists of fixed interest rates that do not fluctuate during the period that you are locked in at. The rates remain the same despite the changes in economy and market conditions. Usually, conventional home loans require quite a high minimum loan amount.

Flexi home loans consist of slightly lower interest rates. Some flexi home loans have no lock-in period. Floating rates fluctuate according to the market condition but in this competitive market, banks are offering very low interest rates for flexi packages. It would be ideal if you buying the property as an investment or are planning to sell it within 5-10 years.

3. Decide on a package with or without a lock-in period

For example, if you would like to sell your property in less than 5-10 years’ time, you might want to consider a package that does not require a long duration of lock-in period or none at all. Another reason for choosing a package without lock-in period would be if you intend to refinance within the next few years. 

4. Compare the interest rates between the packages that you are keen on

Typically, buyers would choose a package with the lowest interest rate but do check if the package consists of fixed rates or floating rates. Floating rate packages would subject to change and you would only be informed of the increase or decrease in rates a month in advance.