What is BLR (Base Lending Rate)?

If you want to buy a house or take a home loan from any bank, you should know the BLR (Base Lending Rate) and the package offer by the bank.
BLR (Base Lending Rate) is a minimum interest rate calculated by financial institutions based on a certain formula. This formula takes into account the institutions cost of funds and other administrative costs.
The BLR is adjusted by banks, but the rate actually is determined by Bank Negara Malaysia (BNM) during Monetary Policy Meeting.
By the way, BLR will change and it is unpredictable whether it will rise or drop. Below is the Malaysia Historical BLR Chart (1980 – 2012)


How to Get the Best Home Loan Package
BLR in Malaysia now is 6.60%, but every bank might offer different package. For example:
Bank A Package

• Bank A offers a package of  BLR-1.8% for 30 years. (BLR = 6.6%)
• Means 6.6 % – 1.8 % = 4.8 %.
• If u borrow RM 300,000
• You will be paying about RM 1,574 per month.

Bank B Package

• Bank B offers a package of  BLR- 2.0% for 30 years. (BLR = 6.6%)
• Means 6.6 % – 2.0 % = 4.6 %.
• If u borrow RM 300,000
• You will be paying about RM 1,537 per month.