If Bank Negara announces a 50bps rate increase, how much will you have to pay each month for your house loan?
How much more will you have to pay each month for your house loan if Bank Negara announces a 50bps rate increase?
The National Bank must come up with robust and efficient policies to reduce domestic inflation and draw capital into the nation as the Federal Reserve quickens the pace of interest rate hikes and our country’s inflation rate slowly increases. Interest rate increases from 25 to 50 basis points from Bank Negara are typically anticipated for July.
If the National Bank announces an interest rate increase, domestic banks will follow suit and raise the interest rates on financial products such as loans and fixed deposits.
Here’s an example of a 30-year loan for RM500,000 at a 4.15 percent interest rate.
Borrowers would have had to take out a loan of about RM2,187 per month prior to the rate increase. If Bank Negara raises the interest rate by 25 basis points, or 0.25 percent, the borrower will be required to take out an RM2,253 monthly loan. This means you’ll have to pay an extra RM66 per month on your loan.
Borrowers would have to pay an additional RM133 per month if Bank Negara raised interest rates by 50 basis points, or 0.50 percent.
RM500,000 mortgage
Interest rate increase of 0.25 percent: pay an extra RM66 per month
Interest rate increase of 0.50 percent: pay an extra RM133 more per month
RM600,000 mortgage
Interest rate increase of 0.25 percent: pay an extra RM80 per month
Interest rate increase of 0.50 percent: pay an extra RM160 per month
RM700,000 mortgage
Rate increase of 0.25 percent: pay an extra RM92 per month
Interest rate increase of 0.50 percent: pay an extra RM186 per month
RM800,000 mortgage
Interest rate increase of 0.25 percent: pay an extra RM106 per month.
Interest rate increase of 0.50 percent: pay an extra RM213 per month.
