Generally, when applying for a home loan, we see two types of home loans, namely Semi-flexi Loan and Full-flexi Loan.
Semi-flexi loans are semi-flexi loans, while full-flexi loans are fully-flexi loans. So how exactly do you choose a mortgage when applying for a mortgage?
1. Account
Semi-flexi Loan consists of a Loan Account and a Savings Account, the borrower of Semi-flexi Loan needs to open a Savings Account in the same bank, and then the borrower can transfer money from the Savings Account to the Loan Account to repay the mortgage.
A Full-flexi Loan consists of a Loan Account and a Current Account. The two accounts are linked and you have more flexibility in making deposits in both accounts.
2. withdrawals and fees
Both types of mortgages allow you to make additional monthly mortgage payments, which will be used to deduct your mortgage principal. However, when you need the money and want to withdraw it, there is a big difference between these two types of mortgages.
Semi-flexi Loan borrowers need to apply in person at the bank to withdraw their deposit and wait 3 to 5 working days for approval. Each withdrawal is subject to a fee ranging from RM10 to RM50, and there is a limit to the amount that can be withdrawn.
Full-flexi Loan borrowers can withdraw as much as they want, that is, they can withdraw via ATM or Online Banking. There is no withdrawal fee and there is no limit to the amount that can be withdrawn. However, Full-flexi Loan borrowers are required to pay a one-time initial fee at the time of borrowing, and a monthly fee every month.
3. Who is suitable for
If you are a part-time worker and do not have a large monthly cash flow, then Semi-flexi Loan is suitable for you. As for those businessmen or borrowers who have a lot of money flow, you can choose Full-flexi Loan because you can withdraw money at any time.
4. Assumptions
Suppose you have taken a mortgage loan of RM1,000,000 from a bank with an interest rate of 4% and a monthly repayment of RM3,000, and now you suddenly have an extra RM100,000 that you want to use to repay your home loan so that you can save on interest, see how the various packages work.
a. Semi-flexi Loan
The direct deduction of RM100,000 from the parent fund of RM1,000,000 means that you only need to pay interest of RM900,000. If you want to withdraw the prepaid RM100,000 in the future, you have to apply to the bank and a processing fee will be levied, which usually takes 3 to 5 working days.
b. Full-flexi Loan
The prepaid amount of RM100,000 will be deposited into a current account. When you need the money, you can withdraw it anytime and the interest rate will be multiplied by the amount of the loan minus the RM100,000 in the current account.
Assuming you deposit RM1 million in the current account, it means you don’t need to pay any interest on the loan, think of saving money in a fixed term but only get 2% interest rate while the mortgage rate is more than 4%, therefore, putting the extra money in the current account is one of the ways to lower the mortgage interest rate.
