Latest Malaysian Bank BR + BLR Rates @ May 2020

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Here are the latest Malaysian bank BR and BLR rates, as of May 2020, and estimates of how much you will save after the recent Bank Negara reduction in OPR!

 

Third OPR Reduction In 2020 : -0.5%

On 5 May 2020, Bank Negara announced the third OPR (Overnight Policy Rate) reduction in 2020 – a 50 point shave.

That means Bank Negara reduced a full percent off the OPR since the last change in May 2019 – one year ago.

Malaysian Bank BR + BLR Rates @ May 2020

What this means is property owners will get a reduction on the interest they pay on their property loans.

Fixed deposit interest rates, on the other hand, will be negatively impacted.

So a reduction in OPR is seen to “encourage” investment and spending.

 

Latest Malaysian Bank BR + BLR Rates @ May 2020

BankBase Lending Rate (BLR)Base Rate (BR)Effective
Date
OldNewOldNew
Affin Bank6.31%5.81%3.45%2.95%14/5/2020
Alliance Bank6.17%5.67%3.32%2.82%15/5/2020
AmBank6.20%5.70%3.35%2.85%14/5/2020
BSN6.10%5.60%3.35%2.85%15/5/2020
CIMB6.35%5.85%3.50%3.00%13/5/2020
Citibank6.30%5.80%3.15%2.65%13/5/2020
Hong Leong6.39%5.89%3.38%2.88%12/5/2020
HSBC6.24%5.74%3.14%2.64%13/5/2020
Maybank6.15%5.65%2.50%2.00%8/5/2020
OCBC6.26%5.76%3.33%2.83%13/5/2020
Public Bank6.22%5.72%3.02%2.52%12/5/2020
RHB6.20%5.70%3.25%2.75%13/5/2020
Standard Chartered6.20%5.70%3.02%2.52%14/5/2020
UOB6.32%5.82%3.36%2.86%15/5/2020

 

Financial Impact Of This BR / BLR Reduction

Let’s take a look at the financial impact of this 0.5% reduction in the BR and BLR rates :

Assumptions

Loan Amount : RM 500,000
Old Interest Rate : 4.50%
New Interest Rate : 4.00%
Tenure : 30 Years

Here is an estimate of how much lower your monthly instalment will become, and how much you will save after 1 year :

InstalmentOldNewDifference
MonthlyRM 2,533.43RM 2,387.08– RM 146.35 (5.78%)
After 1 YearRM 30,401.16RM 28,644.96– RM 1,756.20

This may seem like an insignificant amount of money, but should you continue to pay the old instalment of RM 2,533.43 per month, it will actually shave THREE YEARS off your 30-year loan, and save you RM 94,942.83!

Of course, the BR and BLR rates are unlikely to remain so low for so many years… but let’s say it remains this low for just 3 years.

Here is an estimate of how much you will save in interest over the next 3 years, assuming the BR and BLR rates remain so low :

Accumulated InterestOldNewDifference
After 1 YearRM 22,334.99RM 19,839.74– RM 2,495.25
After 2 YearsRM 44,299.41RM 39,320.73– RM 4,978.68
After 3 YearsRM 65,876.26RM 58,428.38– RM 7,447.88

On average, you should save about RM 200 per month in interest for a RM 500,000 loan with an interest rate of 4.5%.

Now, RM 7,447.88 isn’t a lot of money over 3 years, but if you can invest that money or just plow the money back into your property loan, that will generate you A LOT of money over time :

  • 4% pa for 20 years : RM 16,553.52
  • 5% pa for 20 years : RM 20,203.42
  • 4% pa for 30 years : RM 24,678.54
  • 5% pa for 30 years : RM 33,275.22

 

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