Happy? Monthly mortgage payments may be lower by end 2019.

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Everyone hopes that their mortgage payments become as low as possible. Me too. If we were to wait for banks to suddenly become generous and they slash their rates lower, it will be a long wait. Come on, if they reduce their profit margins voluntarily, then their shareholders will be angry lah. Let’s be fair to all sides. What happens if our Bank Negara (BNM) cuts the interest rate instead?

Hey, if they did, then all the banks will just adjust accordingly and we will have a lower monthly mortgage payment. BNM is expected to cut rates further and this will be to support a weaker market currently. Plus all the trade war uncertainties lah. Malaysia’s two largest banks and their comments.

Article in themalaysianreserve.com Group CEO Tengku Datuk Seri Zafrul Aziz said, “We are expecting another 25bps cut before the end of the year. It would be a marginal impact (on NIM), depending on when in the year it happens…an impact of 1bps-2bps on NIM for the financial year ending Dec 31, 2019.” In May 2019, BNM slashed the policy rate by 25 basis points to 3%. The reason is because of “signs of tightening of financial conditions” amid a growing slowdown in global and domestic economic activity.

Article in themalaysianreserve.com here. Maybank Group president and CEO Datuk Abdul Farid Alias said that Maybank expects another, at least 25 basis points (bps) policy rate cut later this year by the BNM. He said, “Taking signals from central banks all around the world, we expect Bank Negara Malaysia (BNM) to have another Overnight Policy Rate (OPR) cut. With this, we expect a rather flattish NIM due to the additional pressure from the OPR cut.”

So, both the largest banks in Malaysia by assets are predicting the same thing. I think they will most probably be right. I expect the same too because I still do not see any end to the trade war exchanges between the US and China. If any, it has become worse with both sides not backing down. Anyway, that side which started it should be the one to offer the olive branch yeah. (Means show some goodwill first.) We need to always note that ‘what does not kill us makes us stronger.’ Happy anticipating.

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<Featured Image is courtesy of Stock Photos from Jirsak>

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