In Malaysia, the best recommendations for housing loans come from CIMB and Public Bank. They have competitive interest rates, reasonable terms, and many packages. Therefore, this article will compare their loans in terms of interest rates and their key features to help you decide where to apply.
Interest Rates
The interest rate is the key to selecting a housing loan because it shows how much it costs to borrow. CIMB and Public Bank offer variable rates, which are usually tagged as the Standardized Bank Rate (SBR).
CIMB Housing Loan Interest Rates
CIMB offers the Flexi Home Loan with an effective rate of 4.15% (SBR + 1.15%).
Public Bank Housing Loan Interest Rates
Public Bank’s PB Home Loan has a variable rate of + 0.9% (effective rate around SBR 3.9%). The PB Flexi Home Loan lets you make extra payments to lower interest.
Comparison of Interest Rates
Although both banks operate on variable rates, Public Bank has a lower SBR that may translate into lower monthly repayments.
Loan Tenure and Repayment Flexibility
CIMB Loan Tenure and Flexibility
CIMB offers loan tenures up to 35 years or until age 70. Their Flexi Home Loan allows penalty-free extra payments and lets borrowers redraw them for added flexibility.
Public Bank Loan Tenure and Flexibility
Public Bank provides housing loans with a maximum tenure of 35 years or until age 70. The PB Flexi Home Loan allows extra payments to reduce interest and offers a “flexi-repayment” feature for paying more than the required amount.
Comparison of Loan Tenure and Flexibility
Both have the same maximum loan tenure with comparable repayment flexibility, which is using the same SBR 3.00%.
Margin of Financing
The margin of financing (MOF) is the proportion of the house value that the bank is ready to lend. It’s essential because it will decide how much you need to pay upfront as a down payment.
CIMB Margin of Financing
CIMB offers up to 90% financing for housing loans, which means you only need to pay 10% of the property price upfront. Additionally, they may provide an extra 5% to cover legal fees, stamp duties, and other related costs, making it easier for first-time homebuyers to secure a loan.
Public Bank Margin of Financing
Public Bank also offers a 90% margin of financing for home loans, with an additional 5% available for related expenses like legal fees and insurance. This makes both banks quite competitive in terms of the margin of financing offered to borrowers.
Comparison of Margin of Financing
Both have similar financing margins and, therefore, are equally attractive to buyers who desire high loan-to-value ratios. The 5% extra to cover related costs is a bonus for those seeking to minimize upfront expenses.
Additional Fees
Other charges are also attached to housing loans, which should be considered when choosing between banks. These include legal fees, valuation fees, stamp duties, and processing fees.
CIMB Fees
CIMB charges a processing fee of RM200 to RM300 for housing loans, legal fees, stamp duties (about 1% of the loan), and valuation fees (0.25% of the property value). Promotions may waive some fees, so check for offers.
Public Bank Fees
Public Bank’s processing fee is RM200 to RM300, similar to CIMB. Additional costs include legal fees, stamp duty, and valuation fees, which are consistent with market rates. Public Bank may offer fee discounts, especially for first-time homebuyers.
Comparison of Fees and Charges
Both banks charge the same fees for their housing loans. However, fee waivers and promotions could tip the scales in favour of one bank over the other, depending on the timing of your application.
Customer Service and Approval Process
The housing loan shall be conducted with the chosen bank to achieve a speedy, efficient, and effective loan approval decision and good customer relations.
CIMB Customer Service and Approval Process
CIMB usually approves housing loans within 5 to 7 working days after document submission. While service is generally good, some customers experience long wait times during peak periods.
Public Bank Customer Service and Approval Process
Public Bank is known for reliable customer service. Loan approvals take 5 to 10 working days. Borrowers rate Public Bank highly for its attentiveness during loan applications.
Comparison of Customer Service and Approval Process
Both provide excellent customer service, although Public Bank’s approval process is slower than that of other banks. This does not make much difference. Neither of these options will let you down.
Conclusion
The rates and terms are decent enough: Public Bank’s interest rate for housing loan is slightly lower, whereas CIMB provides slightly higher margin of finance compared to Public Bank. Kindly choose according to your needs and compare the promotions of both banks.
Check your requirements and decision; contact Chu Yao for a suitable housing loan at the present moment.