40 years loan tenure? This is the BEST for the buyers?

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SERIOUSLY, I am not sure if this is the best for buyers. I also wonder if there were consultations with working professionals like myself. Perhaps they have by far more professionals who has browsed through by far more data than me. Reported in TheEdgeMarkets.com article here,  Housing and Local Government Minister Zuraida Kamaruddin said, “Bank Negara Malaysia (BNM) is proposing a more flexible loan package with flexible interest rates and an extended maximum loan tenure for affordable home buyers.” She added, “We have engaged with Bank Negara and a few banks during a few sessions and Bank Negara has come up with some more flexible and relaxed terms with regards to loan application and approval. One of it is the extension of maximum loan tenure from the current 35 years to up to 40 years.”  Currently, the maximum loan tenure is 35 years or or until the borrower turns 70 years old, whichever is earlier.

Beyond that 40-year loan, there will also be flexi loans, flexi interest rates and a step-up scheme, which allows the amount of repayment to commensurate with the growth of the borrower’s income over the time. She also shared, “This is something that is easier and more relaxed for the homebuyers so that they can plan themselves. With this sort of approach, we hope Malaysians can change our mentality and know how to plan [according to their] financial capability, As an industry, we cannot remain static. We must know the needs of the market and respond positively to the demand of our customers. Our doors are always open for discussion, let us know how we can assist the industry to enhance efficiency. (I appreciate her conclusion), she said that her ministry will be working towards consolidating data and information and at the same time address data gaps that may exist, so that the policy makers, authorities and stakeholders can all count on an efficient centralised data or property information system that is effective, accurate, useful and timely. (This is extremely important and I will follow this very closely…)

Dear minister, if the majority of all the homebuyers could PLAN by themselves, they would not need so many flexibilities. Truth is, there are MANY who knows how to plan accordingly and it’s best that they are the examples to follow. By the way, what will stop the buyers who could afford a RM300,000 home to now try for RM350,000 home because the tenure is longer and thus the monthly repayment is the same? Are we also providing enough information so that these buyers could really decide by themselves the kind of property they could afford to buy instead of buying the MAXIMUM they could? As usual, wait for the formal announcements then. Oh yeah, the new housing policy is still pending announcement…

written on 9th oct 2018

Next suggested article: Definitely not something to be proud of. 38 percent of youths have personal loan 

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