Mortgage Loan: Bi-Weekly Payment REALLY Save Your Money?

One of the hot topic last month concerning a lot of mortgage loan borrower when there was an article (by other) circulated describing how two (2) simple move could save you a lot of interest. As usual, approached by colleagues, friends, relatives, Facebook friends & etc. “How could this possible?”, “Is this true?”. As I’ve verbally explained to some and this article was meant for all. Sorry for the delay.


It depends! If you are changing to Bi-Weekly mode if there’s this option (with Malaysia’s Bank), and you are making the payment according to the instalment calculated based on bi-weekly payment, you saved “peanuts”.

In order for what mentioned in the previous article to work, you need to do as what the article suggested, you pay Bi-Weekly by dividing your monthly instalment into half and pay every 2 weeks. This sounds true as one month consists of 4 weeks, but one year consist of 52 weeks which will be equivalent to 13 months. Logically this will definitely shorten your loan in term of years as you make extra payment each year. After 12 years, you have made payment for a year extra. As describe in my just previous post, understand the meaning of Daily Rest, each early or extra payment you make will definitely save you interest.

Link to my previous post :

Secondly, you should do the bi-weekly payment correctly. If your instalment due in 1st of July and the instalment amount is RM 1,500.00, Please do not divide the instalment into half and make the payment on RM 750.00 with the balance being paid on 15th of July. If you are doing this, not only Bi-Weekly won’t save you interest but will in fact increase the amount of interest you are paying. The article actually requested you to pay your RM 750 on 15th of June.

For me, just take note of three important points here. First, most of us make instalment every month because the income basically also coming in every month, be it salary or even rental. It makes more sense to manage your instalment that way as well.

Secondly, I agree with the extra payment made each instalment in order to save on interest as this really works. (kindly refer to example in the previous post).

Thirdly, kindly utilise the Flexi-Loan and Semi-Flexi Loan account that you have applied for. Many insisted on Full Flexi-Loan but later to be found out never utilising it but paying the monthly maintenance fee. Whatever extra money placed in this Flexi-Loan account has indeed assisted to save on interest.

Any doubts? Email to

We have a working MS Excel Spreadsheet that could simulate effect of extra payment. Kindly drop me email if you are interested.

For convenience of all, MS Excel file is attached. : Amortization Complete Worksheet V2


Understand YOUR Mortgage Loan & Save thousands of Ringgit !

During 3 years in my financial services industry, one of our major business is in Mortgage/Property loan, one of the important information that we will tell our customer is how the Mortgage Loan repayment schedule work and how is interest being calculated by Bank. 2015-05 Amortization Recently my newly joined colleague came to me again regarding a “Advanced Software” that was sold for few thousands Ringgit to help Borrower save their interests. An argument also roused by National House Buyer Association recently regarding interest calculation of Mortgage Loan. I determined to pass this information to as many as possible. Why should we let Bank earn more and why should we let some to take advantage on the lack of information passed to mortgage loan borrower? Two (2) important concept we need to understand about Mortgage Loan in Malaysia:

  1. Daily Rest

Daily Rest means Interest is calculated daily – a term that sounds simple but how many of us really think seriously about this? It basically means that if you pay your monthly instalment 1 day earlier, will save you 1 day interest of the principal amount. If your loan was RM 500,000-00 at 4.65% a year 1 day interest = 4.65/100 x 500,000-00 x 1/365 = RM 63.70/day. Therefore, if someone show you if you pay one week earlier each month, you will save on your interest, it’s extremely true. But why do you need to pay to being told to do this?

2.  Amortization

The paying off of debt with a fixed repayment schedule in regular installments over a period of time. Consumers are most likely to encounter amortization with a mortgage or car loan.

Quoted from below: Read more: Follow us: @Investopedia on Twitter

Hence, any extra payment made each instalment will definitely save you interest in long run as more will be paid to principal and will immediately reduce your interest on the next business day.

I’ve done a simple example to explain on how significant extra payment can save you thousands of Ringgit on your mortgage loan.

Scenario: If X is having a mortgage loan of RM 500,000.00 and the repayment period of 30 years. The packaged offered was BR + 0.65% with BR at 4%. We assumed that BR maintained at 4% through out the loan tenure of 30 years. Summary TableYou would have observed that there’s a Extra Payment Box where RM 100 was added every month

Extra Payment

We can observe that, we will save RM 38,083.42 and shorten our loan by 2.3 years. Many might doubt about this, but it is really as simple as this. The more you pay extra, the larger the amount you can save.

Feel free to contact us at :

How Does GST affect Property Purchasing Process?

No hotter topic than GST at this moment with less that 48 hours to go. It’s challenging and when google search  research was done on the web for few days, found that many discussed the impact and possible effects of GST on the property market. What we would like to discuss will be the direct impact on every steps on the Property Transaction process.


Kindly refer back to the earlier discussion for the process of purchasing a property :

  1. Placement of Booking
    1. No GST to be charged at this stage as no actual transaction taken place yet at this moment.
  2. Application of Mortgage Loan
    1. If there’s payment of processing fee to be made, the processing fee is subjected to GST, but at this moment no processing fee is charged and therefore no GST involved.
  3. Acceptance of Loan
    1. At this stage, most of the time, no charges involved unless the set-up fee charged by bank for Flexible Loan (Typical amount: RM 200), this Set-up fee is a service charged by Bank and therefore is subjected to GST. Subsequently the monthly maintenance charge (Typical amount: RM10) or redraw charge (Typical amount : RM 10 to RM 50) are also subjected to GST.
    2. Besides that, mortgage protection plan, MRTA or MLTA also signed at this stage and since both are life insurance, no GST should be charged unless Critical illness or others riders included.
  4. Valuation Report
    1. Valuation report is required only for Sub-Sale of completed property. The valuer needed to provide a valuation report for the Open Market Value of the property to bank and the valuation fees will be subjected to GST.
  5. Signing of Sales & Purchase Agreement (SPA)
    1. Up to this part, all the above involve both Residential (GST Exempted) and Commercial Properties. For the discussion below, only commercial properties which are subjected to GST apply unless otherwise stated.
    2. During signing of SPA, purchaser will pay the down payment of 10% and this is part of the transaction, therefore, the down payment is subjected to GST.
    3. The Legal Fees for SPA documentation and Loan Documentation are also subjected to GST, but this is merely to replace Gov Tax charged earlier which is also 6%. The Memorandum of Transfer (M.O.T) and Stamp Duty payable to land office will be excluded for GST.
  6. Commission to Real Estate Agent
    1. Commission payable to Real Estate Agent is subjected to GST. For the common practice in the market, the booking fee paid by potential purchaser is normally treated as commission to Real Estate Agent, this will cause some complication as Seller will need to pay GST for the amount of Commission or brokerage fees paid to Real Estate Agent. (Regardless Commercial / Residential Property because this is payment of commission to brokerage agent) (for more details:} )
  7. Interim/Full Payment to Seller
    1. Either under construction or completed property, for ease of discussion, every time a payment is done to the seller, the purchaser will have to pay GST. i.e. in the event of completed property, when Bank pay the balance sum to seller, purchaser will have to pay the GST of that amount.
    2. In the event the property was under construction, the scenario is still the same, whenever Developer invoices for interim payment, the purchasers will have to pay the GST. This also apply to property which is currently under construction which has not been fully paid up even though the property was purchased 2 years ago.
    3. Example. Mr K purchase an office unit in year 2014 and is 60% completed. The next stage billing comes in the month of May 2015 (10% of the purchase price), bank will release the 10% as the loan was offered earlier but Mr K need to pay the GST for that 10%. With this, Mr K actually need to prepare additional 6% for the remaining 40% which is additional 2.4% of the initial purchase price. At the moment when this article was written, no banks is financing GST.
    4. For more details, refer to Guideline from Royal Malaysian Custom Dept. :

Residential property was listed under Exempted Item for GST which is different from Zero Rated Item. For Exempted item, input tax could not be claimed, hence, it will be transferred to end-user even the final price is not subjected to GST. Item 5 & 7 discussed above do not apply to residential property.

*For reference and discussion only. Discussion was made with understanding of author on the material available. Kindly email to for further discussion.

4D Betting – Betting for Wealth? Greed or Hope?

Since holiday is coming and let the discussion diverted slightly from serious topic. What prompted me to discuss about this was the phenomenon observed on draw dates for 4D betting in Malaysia. Normally these area will be slightly congested especially during few hours before bet closing time on draw dates. Some of the hawkers will also set up their stall near to these shops on draw date.

4D betting in Malaysia take place around 3-4 times a week.

4D Logo

What is the reason for these customers to place their bet? Is it due to Greed? Everyone would like to get rich without having to work? Do we really think that the desire to become richer is Greed? Or is it because the method to become richer by placing a bet is considering greedy because the amount of effort placed is less?

Would it be HOPE? Would it be they are actually buying a HOPE. By placing a bet of RM 1, one is hoping that he/she could win RM 50 ~ RM 2,000. Multiply the amount by 10 or even 100, that person still could not be rich enough to stop working. It is just a hope of winning some to lessen their burden for a period of time or loosen their financial stress for a period of time. How often we heard of a story that one become wealthy enough to stop working and enjoy a life after winning a 4D bet. But still the story of a single person could inspire thousands, ten thousands or even hundred thousands of others who have not win any for their whole life to continue to pay for the HOPE.

A lot of people are willingly squeeze the budget to buy a hope. How high is that hope actually? Statistically, the winning of 1st prize is 1:10000 and by betting the correct 4D, one win about RM 2,500. Statistically in order to win RM 20,000, one will have to bet RM 8 for each betting date at 3 different operators in Peninsular Malaysia which sum up to RM 24 for a chance of 0.01%. Multiply by 3 draws and 4 weeks a month, it will sum up to RM 288 a month.

Now, let’s face a reality of life. The probability of getting a cancer in Malaysia by age of 75 is 15%. Or we could calculate new cancer cases in year 2012 over 29.3 Millions of population in Malaysia, the probability stands at 0.13%. This is 13 times higher than the chance of hitting 4D. With the same budget, one can prepare an emergency fund of RM 1 Million per year and could include other financial threatening possibility. Further to that, most of the time, the money invested for this risk mitigation plan come with certain saving. (Statistic from : Malaysian Cancer Oranisations and Resources)

The purpose for this post was not intended neither to against anyone/anything nor promoting betting.

*This post was started before Chinese New Year season, but wasn’t completed until today. Since it’s completed now, just for reading pleasure. Next discussion will be on GST on property.

What should I do next? – Buying a property

To a first time property buyer, one could be confused and worried about the process to obtain a mortgage loan after confirming a property. We understand that the process could be complicated and confusing to many. Therefore, in this article we will highlight the steps involved.


  1. Placement of Booking
    1. Purchaser normally place a booking through a real estate negotiator/owner (subsale-readily completed property) or developer (under-construction property) after a few viewing and satisfied with the property chosen.
    2. Normally a booking form/sales form will be issued upon confirmation and agreement by both buying and selling parties on price, terms and conditions.
    3. Typically a booking fee will be needed from Purchaser at this stage. (normally 2%-3% for subsale and as determined by developer for under-construction property)
  2. Application of Mortgage Loan
    1. Purchasers will normally have 14 – 21 days to source and secure for mortgage loan prior to confirmation on the purchase.
    2. Purchasers can do this through mortgage advisor or bank. Application can be done concurrently through several banks or financial institution. No cost involved for application according to the industry practice at this moment.
  3. Acceptance of Letter of Offer
    1. A Letter of Offer (LO) will be issued by financial institute if purchasers meet the borrowing criteria of their institution.
    2. Purchaser has the option to compare and understand the differences between different terms and conditions offered by different financial institution.
    3. Purchaser will then acknowledge the acceptance of the offer by signing the LO. A copy will be given to Purchaser for safekeeping.
  4. Sales & Purchase Agreement
    1. Purchaser could then proceed to sign the Sales & Purchase Agreement which confirm the purchase of the property.
    2. During this time, the purchaser will need to pay the balance down payment which sum up to 10% of the purchase price (the booking fee paid earlier should be considered as part of the down payment)
    3. This will be done at appointed Legal Firm. Purchaser will be required to pay the legal fees involved and stamp duty (or Memorandum of Transfer-MOT) during the signing. It could sum to 2.5% or higher of the purchase price. (The sum mentioned is merely for reference as it differ from case to case).
  5. Loan Agreement
    1. This is a separate agreement from Sales & Purchase as this is an agreement between Purchaser and Financial Institution for the loan granted for the property.
    2. This could sometime be done together with SPA if the same legal firm appointed and time allowed.
    3. During the signing too, purchaser will be required to pay the legal fees and stamp duty for this agreement. This would also sum up to around 2.5% of the loan amount. (Again this is merely for reference only)
  6. Own Your Property
    1. Purchaser will normally be informed by Legal Firm when all the processes completed and the property is ready to be handed over to purchaser.
    2. Another indication that a purchaser is about to take possession of the property will be the notice from financial institution with regards to full disbursement of loan and start of monthly instalment.

The flow discussed here is the simplified process without in depth discussion on matters that could arise throughout the process. Details in each process will be discussed in near future.

Feel free to contact us at for further clarifications or mortgage loan application.

What does a Mortgage Advisor/Broker does? When to see one?

Many of the public has yet to know that there’s a group of Mortgage Advisers who work independently from bank to advise and assist client on mortgage loan application for property financing/refinancing.

Instead of being attached to a particular bank, mortgage advisor work independently and normally attached to some firms with license from certain banks as their sales representative. Mortgage advisor would then working as associates with the firm after meeting training and certain certification requirement as set by the bank.

As mortgage advisor, at most of the time, will assist client to do application to more than one bank to increase the chances of approval and for comparison of better offer from different banks since at this moment, there’s no processing charges for mortgage loan application. Also at this moment, there’s no charges to client from Mortgage Advisor but Mortgage Advisor earned the referral fees from whichever bank that secure the client.

When you should see a Mortgage Advisor?

  1. Whenever you need to apply for a property financing and do not have much time to see different salesperson from different banks.
  2. When you want to find out the loan eligibility before you search for the right property.
  3. When you need advice about restructuring of loan and find out more about existing property loan.
  4. When you need an unbiased advice regarding property loan. – “There’s no best product, but there’s product that best suit you”

When you should go to bank instead of Mortgage Advisor?

  1. Mortgage advisor needs full documents and cooperation from client to understand the client’s situation, needs and suitable package/banks. If client is unwilling to disclose or provide income documents, client should opt to visit the bank personally and preferably the existing bank that the client is maintaining the account as most of the information is readily available to them. However, this will limit the client to accept whatever offer made by that specific bank.
  2. Most of the Mortgage Advisor only representing certain bank/financial institution. If client has specific preference on a bank that is not represented by the Mortgage Advisor.

If you are interested to join us as Mortgage Advisor, kindly email you resume to: