Latest Base Rates (BR), Base Lending Rates (BLR), and Indicative Effective Lending Rates (Indicative) of Financial Institutions.
Updated: Dec 4, 2018
Base Rate (BR) replaces Base Lending Rate (BLR) as the main reference rate for new retail floating rate loans effective January 2015.
- More transparent reference rate to enable better decision by consumers in making loan choices.
- Better reflect changes in cost arising from monetary policy and market funding conditions.
- Encourages greater discipline and efficiency among financial institutions in pricing retail financing products.
- Spreads will always be positive for financial institutions.
- Stronger link between BR, market interest rates and Overnight Policy Rate (OPR) facilitating more complete adjustments.
What determines Base Rate
- Financial institutions’ (FI) benchmark cost of funds
- Statutory Reserve Requirement (SRR)
- Borrower credit risk
- Liquidity risk premium
- Operating costs
Indicative Effective Lending Rate
This rate refers to the indicative annual effective lending rate required by BNM from FIs with the following criteria
- Standard 30-year housing loan/home financing product
- Financing amount of RM350k
- No lock-in period
- Base Lending Rate (BLR) / Base Financing Rate (BFR): 6.65%
- Overnight Policy Rate (OPR): 3.25% (Last change: Jan 25, 2018 +0.25%)
- OPR Floor: 3.00%
- OPR Ceiling: 3.50%
Which Financial Institution to Choose?
BR is applicable to floating rate loans and financing facilities for individuals.
Your monthly repayment amount will increase or decrease when there is a change in BR.
The move to BR does not affect existing effective lending rates loan indicated in terms of BLR.
Steps to take as a borrower
- Compare rates before taking out a new loan. Suggested to compare 3 to 5 different FIs.
- Ask for a Product Disclosure Sheets (PDS) including details of effective lending rate and total repayments for your loan amount.
- Ask the FI on what factors may lead to change on the BR.
- Confirm that your cash flow allows you to afford servicing the loan, especially if the rate goes up.
- Look at other factors that may have a impact especially financially. This may include lock-in period, branch availability, and fees charged.
Financial Institutions Rates
|Financial Institution||BR (%)||BLR (%)||Indicative (%)|
|Al Rajhi Bank||4.35||7.25||5.70|
|Asian Finance Bank||4.02||6.85||5.35|
|Bank Kerjasama Rakyat||4.10||7.08||4.90|
|Bank of China||4.05||6.85||5.05|
|Hong Leong Bank||4.03||7.04||4.90|
|Kuwait Finance House||3.65||7.54||4.60|
Note: For reference only. Subject to changes. Indicative rate based on 30-year housing loan/home financing product with financing amount of RM350k and has no lock-in period. E&OE.