Bank Negara’s interest rate hike will not have a significant impact on the B40 low-income group, where one third of the borrowing is at fixed rates and will not be affected by the rate hike.
According to a message from the Deputy Minister of Finance, the two interest rate hikes by the National Bank Negara this year will not have a significant impact on the population. One-third of the low-income group (B40) is financed with a fixed interest rate, that is, car loans and personal loans.
In Bank Negara’s simulation, a mortgage loan of RM300,000 with a repayment period of 35 years would require the borrower to pay an additional monthly installment of RM85 after Bank Negara’s interest rate hike. For a loan of RM500,000, the borrower will have to pay an additional monthly instalment of RM142.
Bank Negara raised the interest rate by 0.25% in May and 2.25% in July this year, up from 1.75% previously. NB will provide various assistance measures to SMEs affected by the rate hike, including targeted loan deferment programs and counseling and debt restructuring services.
In fact, the National Bank has already cut interest rates five times in a row between 2019 and 2020, namely by 0.25% in May 2019, 0.25% on January 22 and March 3, 2020, 0.50% in May 2020 and 0.25% in July 2020. Borrowers already enjoy lower installment offers during the period when these rate cuts are in place.
