According to a message issued by the Deputy Finance Minister, Bank Negara’s measures to increase the Overnight Policy Rate (OPR) in May and July this year will not have a significant impact on people. One third of the low-income group (B40) are financed using fixed rates, i.e. car loans and personal loans.
In the National Bank’s simulation projection, a home loan of RM300,000 with a repayment term of 35 years would require the borrower to pay an additional monthly instalment of RM85 after the National Bank’s interest rate hike. For a loan of RM500,000, an additional monthly instalment of RM142 will be required.
NB raised the interest rate by 0.25% in May and 2.25% in July this year, up from the previous 1.75%. NB will provide various assistance measures to SMEs affected by the interest rate hike, including targeted loan deferment schemes and counselling and debt restructuring services.
The National Bank has actually cut interest rates five times in a row between 2019 and 2020, namely by 0.25% in May 2019, 0.25% on 22 January and 3 March 2020, 0.50% in May 2020 and 0.25% in July 2020. Borrowers already enjoy lower instalment offers during the period when these interest rate cuts are in place.
