Malaysian Bank Base Lending Rate at 6.25%

BOOYA!!

Just got back from Melbourne from a 2wk holiday. Still trying to catch up on what I've missed here.

Naturally, the office internet took a turn for the worse the moment I left. With the absence of the Alpha Male, two computers and one notebook immediately revolted, and the users left without internet use for the entire duration I was gone...

I have a theory that even silicon has a kind of sentience, cos how else can I explain why some things will work only in my presence and then loose its will to live when I'm gone.


And I just found out that the BLR went up 0.25% last week.

This is relevant to all those who are paying for a house...

The Base Lending Rate has gone up 0.25% last week.


All those people who have consulted with me for mortgage advice... I had been advising a Fixed Rate Loan (like AIA's 5.99% Fixed).

Because our BLR of 6% was the lowest we've ever seen in M'sia for the past few decades! (Well, yea, S'pore has a BLR of 4% with most banks giving loans at BLR-1.00%... but that's a BAD sign of things to come!)

Yet most people are optimistic that interest rate can get cheaper still.

The US Federal Reserve thrashed the Fed Funds Rate to 1% to recover from the crash of technology stocks a few years ago. At the same time, real estate skyrocketed, bank borrowings increased, inflation went through the roof. And for the past 2.5 years, they've been raising rates by 0.25% every time they meet. Most anticipated that they'll stop raising at 4%, but they just went up to 4.25% yesterday.


The Malaysian BLR had been lagging & holding steady during this time, and I anticipated a rate increase before the end of this year.

And here we have it.

Loan rates have gone up, but why not the Fixed Deposit rate!? I've been putting my cash in 1mth FD, just waiting for this...



So what does a 0.25% increase mean? Assuming you're not increasing your monthly payments, it means your 30yr loan is now a 32yr loan. You're paying an extra rm14,000 on a 100k loan.


Oh, and in the last 1.5yr, my gold investment has gained more than 25%... If only I had invested more than rm250... But the roof over my head had seemed a safer investment at the time. But a rm50 profit is still a rm50 profit.