AskGuru Q&A Community

Make confident property decisions with advice from our experts

Asked by
Hi propertyguru,
I am first time home buyer and for own staying. I cannot decide which bank loan should I take:
a) 90% loan margin. Interest rate 4.65% for 35 years
b) 80% loan margin, interest rate 4.47% for 30 years
Both are fixed loan. I have no problem to pay 20% upfront. But for long term perspective ( ie currency depreciate), which offer is better? High Margin or low interest rate?

Thanks in advance.
0 •
242 views
Upvote Upvoted
Want this question answered?
Get faster responses from our experts by upvoting.
Be the first to upvote this question.

1 Answer

<en>David</en> <en>Wong Lai Kwong</en>
Replied
Dear Anonymous,
It all depends on your situation:-
1. Having a higher loan margin at 90% allows you to have the 10% for future investments in another property, business, stocks etc that may bring you a higher return than 4.65% per annum borrowing interest
rate. Property appreciates in value over time and hedges against inflation.
2. The old school was not to borrow high margin from the bank as you have to service the bank loan for 30 years or 35 years that will add up to the eventual property purchase price. However, bear in mind that you may be able to pay off the loan sooner as your income increases either through your traditional pay cheque or your other investments. The current interest rates are much lower than those years ago and it's monthly rest too.
My 2 sen worth of thoughts.
David Wong
 +60193330573 
Principal Licensed Agent E2097
QUANTUM REAL ESTATE - E(3)1320 Read More
0
Upvote Upvoted

Still looking for answers?

Get advice from our community of experts

Ask Your Question
Previously Asked Questions