Compare your current loan against a refinanced loan.
Net saving after costs
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Monthly saving
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Interest saved
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New loan stamp duty
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Break-even
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Worked example
Say you owe RM350,000 with 20 years left, currently paying 4.6 percent, and a new bank offers 3.9 percent over the same remaining tenure. At 4.6 percent the monthly repayment is about RM2,233; at 3.9 percent it falls to about RM2,103, a saving of roughly RM131 a month. Over the full 20 years that is about RM31,362 of interest saved. Switching is not free: legal and valuation fees here are RM4,000, plus a fresh 0.5 percent loan stamp duty on the RM350,000 balance, which is RM1,750, for total switching costs of RM5,750. The net saving after costs is about RM25,612, and you recover the RM5,750 outlay in about 45 months, so refinancing pays off comfortably if you keep the loan beyond that point.
| Item | Amount (RM) |
|---|---|
| Monthly saving | 131 |
| Interest saved over 20 years | 31,362 |
| Legal and valuation fees | 4,000 |
| Loan stamp duty (0.5%) | 1,750 |
| Net saving after costs | 25,612 |
How it is calculated
The tool repays the same outstanding balance over the same remaining tenure at both the current and the new rate, using standard amortisation, and takes the difference in monthly repayment as your monthly saving. Because the tenure is held constant, the total of those monthly savings equals the interest you avoid over the life of the loan. Against that it sets the switching costs: the legal and valuation fees you enter, plus a fresh 0.5 percent stamp duty on the loan agreement for the refinanced amount, since Malaysia charges loan stamp duty on each new facility. Net saving is the interest saved minus those costs, and break-even is the number of months of saving needed to recover them. Refinancing makes sense when you will hold the loan well past break-even, and a larger rate gap or a longer remaining tenure improves the case.