Furthermore, asking prices (in the sub-sale market) are falling and the financing climate is becoming more favourable to buyers.
The most significant financial responsibility you'll have to cope with - monthly instalments for the next 30 years – will now be reduced as well.
This is owing to the forgiving interest rate environment created by BNM's Overnight Policy Rate
(OPR) cuts: It is presently at an all-time low of 1.75%
(the lowest percentage on record).
Compared to previous rates of 8% to 9%, or even double digits, the monthly payment will be less due to the lower interest rate (if you opt for a mortgage with a variable rate).
In other words, you can now enter into an initial agreement at a considerably cheaper interest rate if you are a homebuyer who is window-shopping for a new home loan.
As a result, depending on eligibility, now is an excellent time to take up a home loan
because of the present low-interest rates.
Tips and Precautions for Property Buyers
For those who are considering making a purchase but are still unsure, the following are some useful tips and precautions to take before making a move.
- Do research on the developer, the project's location, and the infrastructure supplied. For instance, fibre-optic connections, strong internet coverage, security, and more.
- Look for residential properties valued between RM200,000 and RM850,000.
- Residential properties
are recommended instead of offices, retail units and small studios. Malaysia's population is expected to expand by 6-8 million people in the next 15-20 years with the number of senior citizens rising from 7 million to 14 million or more. This will translate to strong demand for residential properties
in many years to come.
- For those who are considering making a purchase, the first step is to double-check their loan eligibility
with the banks.
In a Nutshell
As previously stated, the current overnight policy rate is at an all-time low of 1.75%, with total cuts of 125 basis points so far this year to mitigate the economic effect of the Covid-19 pandemic.
Low bank lending rates are a significant plus for individuals wanting to get a loan to buy a home since it can translate to lower monthly repayments (as much as RM1,000 or above for bigger mortgages).
So for eligible property buyers out there, now is the time to do some research and get yourself a good bargain. Get started by checking your loan eligibility with the banks.