How BLR Increase Impact On Your Housing Loans

Has BLR Increased?

When did BLR Increased?

Why did BLR Increased?

How will BLR Increase Impact on my loan instalment repayments?

Whether knowing or unknowingly, Bank Negara Malaysia has increased the BLR rate to 6.9% p.a. from the current 6.85%. Well… how do I know? Didn’t your bank call and inform you that your housing loan interest rate has increased? I also got to know through a friend that met few days ago… He was surprised by the increased in installment and when he called the bank… He was even more surprised when the bank mentioned that Bank Negara Malaysia (BNM) has increased the BLR rate from 6.85% to 6.9% last month (Feb 2016)… Is this true? Not sure. Any official reports? None that I can find other than the report I attached below that I found online latest update: January 2016

how will blr

The next question would be… I thought BLR rate should be standard across all banks as it is the rate from BNM. But again, I am not sure why some banks apply different BLR rates. Then it would be really a scare if your bank that you took the housing loan from back 3 years ago is charging over 6.95% BLR ++.

Let’s talk about what will happen when the BLR went up or when the BR increase or when the interest rate for your housing loan increased. There are 3 options for you if the interest rate went up:

1) Increase in monthly instalment payments

2) Increase in loan tenure with the existing instalment payments

3) Ignoring the increase in instalment payments, and bank would include the outstanding amount in CCRIS report


Do you know that the 1% increase in the home loan interest rate will increase your home loan tenure to another 10 more years if you did not increase in your monthly loan repayments? How then do you think is the best way to protect yourself against the increasing in interest rates? Will BLR increase? What do you think? Read more in my article.

Have you ever thought why the banks are not able to offer fixed rate housing loan? And also only offering very low interest for fixed deposit? Banks are govern by BNM. So if BNM is increasing the interest rate, how then do you think the banks will act? Of course they will act in tandem with BNM’s direction. If BLR increased, the bank loan interest rates will move in tandem and will increase as well. This is because the banks are using borrowed money to lend to the borrowers – housing loans.


How to protect yourself against the fluctuations of BLR rate?

There is fixed rate home loan in the market provided by AIA. Protect yourself against interest rate movements so that you could have a good night sleep even when the interest rates shoot up in the future. With a fixed home loan rate, you would be securing your instalment payments and the interest payments would be predictable at all times for the entire duration of the loan. This would be in your favor and you are able to save on the interest payments when the interest rate goes upwards.

On the other hand, if the interest rate goes downwards, you could always opt for refinancing at a lower rate. You have nothing to lose.

So while it is difficult to forecast the Malaysia BLR rate trend, it would be a good time to reassess your current home loan plan and check with your financial consultant to protect yourself against uncertainty. Don’t wait for the adjustment to take action and end up paying higher interest on your home loan.

Have you ever thought why AIA is able to offer fixed rate housing loan? I tell you this. Because AIA has very strong financial status and is able to provide the fixed rate housing loan as a added value service to our customers. All BECAUSE AIA CARE for you! Call us now for a free consultation on your housing loan at 017-3237506 (Andrea Loh).


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