Property Loan

A property/mortgage loan is a debt instrument. A mortgage is a loan that used land or immovable assets as a security for the loan. These loans are tied explicitly to a real-estate property, such as land or a house. The borrower signs an agreement with the lender (usually a bank or financial institution) in which the borrower collects cash in advance and then makes payments over a specified period of time until the lender is paid back in full.

Property Loan Types in Malaysia

Choosing a mortgage/ housing loan package is not just about the interest rate and fees you are going to pay. In fact, you will also need to consider the type of mortgage/ housing loan that suits you. Typically, there are four types of loans, which are flexi loans, semi-flexi loans, non-flexi loans, and fixed-rate loans:

Flexi Loan:

Full Flexi is run on a mortgage current account, you can withdraw and deposit money to the mortgage current account without any additional charges and procedures.
The installment amount will be deducted from the mortgage current account as scheduled every month.
Extra money can dump into mortgage current account anytime to save interest and withdraw anytime at no fee (just online transfer from current account).
You will need to pay a monthly maintenance fee and one time setup fee.
Suitable for self-employed or businessman, due to always have extra cash flow from business or investment prior paying to supplier/creditor.

Semi-Flexi Loan:

You can make advance payments on the loan, without sticking to an unchanged loan schedule.
Semi flexi don’t have current account (like full flexi), just loan account, money can put in to save interest.
Can dump in money to loan account to save interest. For Withdrawal need to pay one time service charges RM25 or RM50, withdrawal at bank counter.
You will have to give 2 to 5 days of buffer time to the bank prior to withdrawal.
You need to inform the bank to make the capital prepayment.
Suitable for fixed income earner / employment income.

Non-Flexi Loan/ Basic Term Loan:

A loan with a fixed repayment schedule and the same monthly instalment throughout the entire repayment period of the loan.
Borrower need to walk into physical bank counter to request the additional payment arrangement.
Banks restrict the borrowers from withdrawing extra funds which may have paid more than the scheduled amount.

Fixed-rate Loan:

The same interest rate for years, no matter what happens to the interest rates in the period.
Less stress as you will be paying the same loan amount every month.