In Malaysia, the middle class has been growing pretty rapidly. This is a very encouraging sign for the country and for all of those who live within it. A robust and stable middle class is the best way to develop a solid tax base to provide services to citizens. One of the most common indicators of entering the middle class is the ability to buy a home. Buying a home provides you with a stable base of support when you are trying to advance in your career and earn more money. Also, a home provides you with responsibility. Homeowners often need their homes painted, their plumbing fixed, and other such repairs to their homes. Those often require hiring a contractor; therefore, homeowners are a boost to their own local economies. For these reasons, governments like to encourage owning homes. They do this through regulations and incentives for loans.
A home is a very big investment; in most people’s lives, it is the largest investment they’ll ever make. A home, when properly maintained, will be worth more in a few years than what it’s worth when you buy it. The only exception would be an economic downturn; if the middle class is growing at a sustainable rate, any downturn should be temporary. Therefore, your home is an investment you can make in your future. Housing loans in Malaysia are your first doorway to owning a property. There are different options for loans, depending on which is right for you.
One of the biggest considerations when considering a loan is the repayment period. The longer your repayment period, the smaller your mortgage payments will be. If you have a 35-year mortgage, you will pay relatively small monthly payments. These longer mortgages are often a sign of stability in a marketplace as well. If a bank is worried about your ability to repay or worried about its own profits, it won’t offer long mortgages. A 35-year mortgage is great for first time home buyers. However, it does have a few drawbacks.
A longer mortgage means you will spend more time paying off your loan; every loan payment also comes with interest. So you will end up spending a lot more over 35 years than you would if you have a 25-year mortgage. You’ll pay less each month, but more in the long run. If you are sensitive to the amount you’re paying each month and less so to the overall amount, it makes perfect sense.
An interest rate is going to vary depending on a lot of factors. The value of the home, your own collateral, and the length of your mortgage are big factors in the interest rate. If you choose a longer term mortgage, you’ll have a slightly higher interest rate. There are also mortgages that offer a variable rate that’s factored as a percentage of the base rate, which are great for those who prioritise the payments over the predictability of a monthly mortgage payment.