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Interestingly come through some articles about should we settle our mortgage early. 

Would like to seek advice from sifus here, what are your thoughts? 


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I think it's depend, if you want to sell the property, I think we don't have to settle our mortgage as fast..but if you want to keep keep for your own stay, ya maybe :D Looking for expert in this as well ! 

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if you plan to buy more property, then keep more cash on hands and choose mortgage loan with overdraft facility or flexi loan payment which can withdraw the advance payment has been made, and save interest. 

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If property is for own stay, yes. If for rental yield returns. no.

If for rental yield reture, best to drag the loan repayment tenure as long as possible or dump a huge downpayment to lessen the monthly installment.

Agree with Ngoi, if have overdraft facilities, or can refinance to acquire more cash for business venture or buy another property.

Just my 2 cents.:^)


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Much appreciated on these advises~thank you~

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Your welcome :) 

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You are most welcome, remember that the longer you take to repay the bank loan. the higher the total purchase price you will eventually pay.

For example, if you take a RM350,000 bank loan at 4.5% interest rate with repayment period 35 years... (RM1656.4 installment)

At the end of the loan repayment of 420 months, you are effectively paying double... close to RM350,000 in interest!

One tips to save on interest, using the same example above. If you make fortnightly (every 2 weeks) payments of RM828.2 instead of RM1656.4 per month. You effectively reduce your total interest by a huge chunk, and definitely pay off your bank loan in less than 35 years!

RM1656.4 X 12 months = RM19876.8

RM828.2 X (52weeks a year/every 2 weeks) = RM21533.2

I believe most bank charge daily interest on bank loan, so the more frequent and any extra payment (loan principle payment) to the bank in a year, will reduce total interest paid over the same period.

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@domng Thanks for the information. Didn't think about that.


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Thanks great info. Wonder have any template for the calculation?


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AN excel formula can do the magic. =)


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There is a lot of Amortization Schedule table online that you can refer to. Definitely lower total interest paid if pay installment twice a month instead of once a month.

If followed through the entire tenure, will be sure to pay off loan sooner than expected. Maybe can negotiate with the banker the next time we take a loan for investment?

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http://www.vertex42.com/ExcelTemplates/loan-amortization-schedule.html

This is a good template for amortization schedule available free online

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only apply to flexi loan, term loan is not applicable usually, depends on bank loan package.

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what is the difference between flexi loan and term loan?

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nicsonic so you meant only flexi loan you could settle the loan earlier in advanced but not term loan? 

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I only know fixed interest loan and floating interest loan (based on Base Rate)... some loans tie to a current account to reduce the interest if you set aside some money in the current account to offset the interest. Correct me if i am mistaken?

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