Our mortgage payments may stay the same in 2026. Like it?

Our mortgage payments may stay the same in 2026. Like it?

When interest rate falls, it stands for something lah

I know low interest rate is a good thing for us; the ones who still have mortgages to pay. This is especially true for those who are struggling to stay above water with their mortgages. A lower interest rate will provide that relief which is very much needed. However, when rates are lowered, it meant that Bank Negara Malaysia (BNM) sees something which could be happening in the future. Something which we may not yet see. For example, a slowing economy in the near future.

Action is needed in advance, not when something already happened

Thus, they have to take the action now. Lower the rates so that people are willing to invest more of their money versus leaving it in the bank. Maybe people are willing to buy a property now because rates are lower. So, general idea is to induce consumption if indeed there are signs that the demand is slowing down. Briefly, this is not a good sign lah. We will also look at what happens when rates keep increasing, is it then a good sign after the below article.

Article in thestar.com.my. Analysts have expected Bank Negara Malaysia (BNM) to maintain the benchmark rate at 2.75 per cent in 2026 despite the United States central bank’s latest rate cut.

The US Federal Reserve (Fed) lowered the key lending rate by 25 basis points (bps) to 3.50-3.75 per cent in its two-day meeting that ended Dec 10, 2025.

This was the third rate cut in 2025, with the first on Sept 17, when the Fed lowered the federal funds rate by 25 bps to 4.00-4.25 per cent. The second cut came on Oct 29, when the Fed again trimmed rates by 25 bps to 3.75-4.00 per cent.

Commenting on this, Apex Securities Bhd said it sees limited implications for BNM’s monetary policy, with the Overnight Policy Rate (OPR) expected to remain at 2.75 per cent through 2026, as policy stays accommodative amid firmer domestic demand and improving external conditions. Article in thestar.com.my.

When interest rate rises, it also stand for something too

If rates are increased, it does not mean the economy is doing very well. Generally, we like to think that because the economy is growing too fast, thus our BNM may want to curb any excessive buying. Hmm… if economy is growing, even if too fast, what’s the problem here then? Why we want to slow it down? Well, one simple example. If everyone thinks the property market is going to go up, everyone starts buying. Prices can keep changing for every transaction and always going up. Well.. salaries do not rise with every transaction yeah. So, when prices kept going up and salaries stay the same, we will have unafford

Just enjoy low rates, it’s not always the case a long time ago

The current low rate regime has been around since 2000. It was not this case before 2000. In fact it was elevated or double the current rate in the 90s. Imagine paying double of the mortgage payment you are paying today. From RM1,500 to RM3,000. Or from RM3,500 to RM7,000. That would be very financially painful yeah. This is why it’s good to enjoy the current low rates.

No one knows when the next cycle of higher rates will return. Hopefully it never does or at least for a long time to come. Currently, developed countries are mostly on the reduction path. So it’s not likely for Malaysia to be on a total opposite path.

Happy understanding. 

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