How BLR increased Will Affect You?

Posted on: 2014-07-18

Bank Negara Malaysia (BNM) have increased the overnight policy rate (OPR) at 3.25% from 3.0% in the monetary policy committee (MPC).

This OPR hike may translate to an increase in the pricing of loans for consumers.

Banks had started to announce their increase in Base Lending Rate (BLR). Public Bank are one of the banks that had confirm their new BLR is 6.85% effective 10th July 2014.

Most analysts are expecting a high probability of a rate hike in 2014, which it is true. While less a handful opined that it could go up to 50bps by end of 2014. If there is a 50bps hike, one can generally expect that BLR will increase to 7.10%.

The OPR is an overnight interest rate set by BNM. It is interest rate at which a bank lends to another bank.

The OPR, in turn, has an effect on employment, economic growth and inflation. It is an indicator of the health of a country's overall economy and banking system.

If you're a borrower, when the interest rate goes up, you need to pay more in terms of instalment. Alternatively, your term of loan (loan tenure) increases if you don't want to change your instalment payment.

But, if you are a depositor, for example you have fixed deposit or saving account with the banks, this mean your fixed deposit and saving account dividend will be increase too.

OPR, BLR & deposit interest rate are co-related. Once OPR increase, BLR and deposit interest rates will be follow suit too.
Here is the example of how it would affect you:

Based on the example above, the 25bps hike will not be severely affect. However, over the loan period, it comes up to a substantial amount.


Share:

Source From: http://malaysiahousingloan.net/2014/07/12/opr-blr-increase-10th-july-2014/

Other News & Articles


Is now a good time to upgrade? Things to consider when moving up the property ladder

You are not the only one planning to move up the property ladder. In the first half of 2018, upgrader buyers make up the second largest group in the primary market at 32%, compared with first-time buyers who account for 43%...

Posted on: 2018-12-05

Budget 2019 Highlights

This years budget carries the theme of Credible Malaysia, Dynamic Economy, Prosperous Rakyat. The budget will focus on three main thrusts with 12 key strategies to recapture Malaysia’s ‘Economic Tiger’ status...

Posted on: 2018-12-05

Being a landlord for the first time? Top tips for you to learn

To succeed in property investment with high rental yield, a landlord must learn the obligations and details of the renting process....

Posted on: 2018-11-27