House Refinance Calculator Malaysia

Refinance Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Monthly Payment (PMT):

Total Payment:

Total Interest:

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1. What is House Refinancing?

House refinancing in Malaysia involves replacing your existing home loan with a new one, typically to get better interest rates, change loan terms, or access equity in your property. This calculator helps you estimate your new monthly payments.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( PMT \) — Monthly payment
\( P \) — Principal loan amount (RM)
\( r \) — Monthly interest rate (annual rate ÷ 12)
\( n \) — Total number of payments (years × 12)

Explanation: The formula accounts for both principal and interest payments over the loan term, with interest calculated on the reducing balance.

3. Importance of Refinancing Calculation

Details: Accurate refinancing calculations help you determine if refinancing makes financial sense by comparing new payments with current ones, including any fees or penalties.

4. Using the Calculator

Tips: Enter the new loan amount in RM, annual interest rate in percentage, and loan term in years. The calculator will show your estimated monthly payment, total repayment amount, and total interest paid.

5. Frequently Asked Questions (FAQ)

Q1: What costs are involved in refinancing in Malaysia?
A: Typical costs include legal fees, valuation fees, stamp duty, and possibly a penalty for early settlement of your current loan.

Q2: How do I know if refinancing is worth it?
A: Compare your potential savings from lower payments against the refinancing costs. Generally, you should save at least 0.5%-1% in interest rate.

Q3: What's the typical loan term for refinancing in Malaysia?
A: Most banks offer refinancing terms up to 35 years or until age 65-70, whichever comes first.

Q4: Are there tax implications for refinancing?
A: In Malaysia, there are no tax implications for personal home refinancing, but consult a tax professional for your specific situation.

Q5: Can I refinance if my property value has decreased?
A: It depends on your loan-to-value ratio. Banks typically refinance up to 90% of the current property value for residential properties.