Refinance Home Loan Calculator Malaysia

Monthly Payment Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

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1. What is Home Loan Refinancing?

Home loan refinancing in Malaysia involves replacing your existing mortgage with a new one, typically to secure better interest rates, change loan terms, or access equity. This calculator helps you estimate your new monthly payments.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (MYR)
\( r \) — Monthly interest rate (annual rate divided by 12)
\( n \) — Total number of monthly payments (loan term in years × 12)
\( PMT \) — Monthly payment amount (MYR)

Explanation: The formula accounts for compound interest over the loan term, calculating the fixed payment needed to fully amortize the loan.

3. Importance of Refinancing Calculation

Details: Accurate payment calculations help you determine if refinancing makes financial sense by comparing potential savings against refinancing costs like legal fees and stamp duty.

4. Using the Calculator

Tips: Enter the new loan amount (principal), the annual interest rate you expect to get, and the new loan term in years. The calculator will show your estimated monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: What costs are not included in this calculation?
A: This calculator doesn't include refinancing costs like legal fees (typically 1-2% of loan amount), valuation fees, or stamp duty (0.5% of loan amount).

Q2: How does Malaysian BLR/BFR affect refinancing?
A: Most loans are based on OPR (Overnight Policy Rate) plus bank's spread. When OPR changes, floating rate loans will adjust accordingly.

Q3: What's the typical refinancing lock-in period?
A: Most Malaysian banks impose 3-5 year lock-in periods with penalties for early full settlement.

Q4: How does flexi-loan differ from conventional?
A: Flexi-loans allow extra payments that reduce principal, potentially saving interest, but may have higher rates or fees.

Q5: Should I refinance to a shorter term?
A: Shorter terms mean higher payments but less total interest. Compare the increased payment against potential savings.