Cheap MAYBANK home loan rates can be a trap !

I took up a private residential home loan from MAYBANK 1 year ago when I bought a private property under construction with TOP expectation in 2012.
When I signed up with MAYBANK , loan rates were at almost 4% for the 1st year rising to above 5% in year 3. Since my investment is under progressive payment , my loan quantum of 1,100,000 is not immediately issued to the developer.

To date , a total of $460,000 has been paid to the developer and my current interest is 4% , in view of their recent publicity in the media and TV that they are offering the cheapest loan at well below 2% , I requested them for a re-pricing of my interest rate . They told me that it is NOT possible on the $450,000 already disbursed . I then asked if the balance of my loan quantum will be at the new rates as advertised , they said NO ! Thus, I have committed myself to at least 3 years of very high interest rates. If the balance of $650,000 has NOT been disbursed to the developer , why cant MAYBANK treat their loyal clients fairly to keep them as their valued clients? Instead they insisted in charging me based on the agreement signed last year when rates were still very high even before the loan is activated.

I then told them I wish to opt out of the balance since it is not disbursed yet and they warned that my penalty for breaking the agreement before the lock-in period of 3 years is well above $20,000 ! I am apalled at their policy of holding me at ransom under this unfair practice just because of a loan agreement signed earlier. If they allowed me to opt out of the balance $650,000 which is not paid out to the developer yet without this heavy penalty , I am willing to continue with the loan already disbursed , I would not have felt so disappointed .

I am wondering if any forumers are in a similar situation and perhaps share your views and advice on how to deal with this Bank ? I could have saved at least 50% of loan repayment amount based on the new interest rates i.e if based on old rates say $$4,000 ( including interest )a month , with new rates I pay $2,000 on the $450,000 currently in force.

Have you ever considered the situation if interest rates were to balloon? Then could the bank asked for a review even though a legally binding agreement had been signed???

petertok said:

I am apalled at their policy of holding me at ransom under this unfair practice just because of a loan agreement signed earlier.

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So you want to get out of an Agreement which you signed in the absence of any form of undue influence or coercion from the Bank ?

And you called that 'holding me at ransom' ? The Bank is holding you to the Agreement, not ransom.

Did you even seek legal advice from the lawyers who acted for you in the mortgage ? Your only option is to wait till the 3-year lock-in period expires, and seek refinancing with the same bank or different bank.

Let's see it this way-

1 year ago you placed a 3 years Fixed Deposit with the bank at say 3%.

Now one year later the rates for 3 years Fixed Deposit dropped to say 1%-can the bank now come to you and say they will pay you a new rate of only 1% ?.

cuckoo investor,,,,,,, if interest goes up, can adjust or not?

better still, his investment property dropped 50%, can tell developer to adjust the signed prices or not?

stupid idiot,,,,,,,

of course cannot la, the agreement sign between the bank at you donkey of years ago is the agreement you and your bank made at that time. black and white cannot change.

the offer they made now are for the current who wish to enter into the agreement with them. totally different story. even if the current offer is better, too bad you have to suck thumb

4% up is so high, in the 1st place why borrow? :o

are you trying a mahathir, do you want to wiggle out of an agreement that you had signed. just like he tried to wiggle out of the water agreement and the ktm agreement. we call these people "prataman" pian lai pian ker

You;re just a typical cheapskate whose word has no value nor your commitment has no integrity.

You most probably cheat on your wife.

In my book you're an ASSHOLE.

petertok said:

I then told them I wish to opt out of the balance since it is not disbursed yet and they warned that my penalty for breaking the agreement before the lock-in period of 3 years is well above $20,000 ! I am apalled at their policy of holding me at ransom under this unfair practice just because of a loan agreement signed earlier. If they allowed me to opt out of the balance $650,000 which is not paid out to the developer yet without this heavy penalty , I am willing to continue with the loan already disbursed , I would not have felt so disappointed .

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Lodge your case with FIDReC - I don't think the breaking fee of 20k is reasonable. Also check with other banks on the 'break fee' for comparison.

commoner said:

cuckoo investor,,,,,,, if interest goes up, can adjust or not?

better still, his investment property dropped 50%, can tell developer to adjust the signed prices or not?,,,,,,,

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I sympathise with him. That's why Ah Long still continues to exist because they think banks show no mercy.

Recently, the Indons tried to do the same with the gas they supply to Singapore. They signed an agreement to supply gas to Singapore at an agreed price for some 20 years. Now they want to increase the price. LKY blew his top, and publicly leaked it to Sporean and the world. For this we must thank MM Lee for his gut and preserving the interest of Singapore.

The Malaysians, a little bit fairer. They signed an agreement to supply rain water - that might otherwise flow into the sea - to Singapore long, long ago at an agreed price of 3 Malayan cents per 1000 gallons (Singapore graciously converted the 3 Malaysian sen to 3 Singapore cents as the dollar is 140 per cent higher when Malaysian realised the opportunity to revalue. Wonder whether the Malaysians will do the same if the dollar falls below the ringgit).

Mahathir tried to pull the same trick to revise the price to more than $1 dollar. MM Lee stood his ground and Mahathir backed off - MM Lee got more staying power. For this again, we must show our gratitude to him. At least the UMNO boys did not throw shit or urine at our embassy like the Indons did to them recently.

Similarly many of our airline companies and power stations signed such agreement with gas and oil supplier to hedge against price increases. Too bad if price of oil declines during that period - at least the supply is constant.

Back to specific banking case, there was always a possibility that interest rate could have shot up to more than 5%. In that case, our borrower could smugly have said that it was a decision well made. He called himself an "investor" rather than a home owner. He must consider himself a bad investor this time. He may just have to sit through the lock-in period as soundly advised by experts here.

Comb the fine lines and see whether anything can be salvaged. May be there is a proviso that says prices can be renegotiable if current interest rate varies either way, which I doubt so during the lock-in period. My three sen worth of idea.

petertok said:

I took up a private residential home loan from MAYBANK 1 year ago when I bought a private property under construction with TOP expectation in 2012.
When I signed up with MAYBANK , loan rates were at almost 4% for the 1st year rising to above 5% in year 3. Since my investment is under progressive payment , my loan quantum of 1,100,000 is not immediately issued to the developer.

To date , a total of $460,000 has been paid to the developer and my current interest is 4% , in view of their recent publicity in the media and TV that they are offering the cheapest loan at well below 2% , I requested them for a re-pricing of my interest rate . They told me that it is NOT possible on the $450,000 already disbursed . I then asked if the balance of my loan quantum will be at the new rates as advertised , they said NO ! Thus, I have committed myself to at least 3 years of very high interest rates. If the balance of $650,000 has NOT been disbursed to the developer , why cant MAYBANK treat their loyal clients fairly to keep them as their valued clients? Instead they insisted in charging me based on the agreement signed last year when rates were still very high even before the loan is activated.

I then told them I wish to opt out of the balance since it is not disbursed yet and they warned that my penalty for breaking the agreement before the lock-in period of 3 years is well above $20,000 ! I am apalled at their policy of holding me at ransom under this unfair practice just because of a loan agreement signed earlier. If they allowed me to opt out of the balance $650,000 which is not paid out to the developer yet without this heavy penalty , I am willing to continue with the loan already disbursed , I would not have felt so disappointed .

I am wondering if any forumers are in a similar situation and perhaps share your views and advice on how to deal with this Bank ? I could have saved at least 50% of loan repayment amount based on the new interest rates i.e if based on old rates say $$4,000 ( including interest )a month , with new rates I pay $2,000 on the $450,000 currently in force.

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An agreement has been entered into between you and Maybank, and you suka suka you wanna renege. Are you from India?

I signed a letter of acceptance with OCBC to borrow $2m to finance a property purchase, and before the conveyancing was
completed, I sub-sold it for a profit. OCBC penalised me $20,000 for aborting the loan.

aiyah, the 4% interest is only on the amount disbursed. your lock in is 3 years.

u likely have 1.5 years or less to go. after that re-finance with another bank that will give u a better package lor.

Queen Seok Duk said:

So you want to get out of an Agreement which you signed in the absence of any form of undue influence or coercion from the Bank ?

And you called that 'holding me at ransom' ? The Bank is holding you to the Agreement, not ransom.

Did you even seek legal advice from the lawyers who acted for you in the mortgage ? Your only option is to wait till the 3-year lock-in period expires, and seek refinancing with the same bank or different bank.

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Agree. The contract terms are as such and there is no particular reason to think other banks would not similarly adhere to contract terms.

toyohon said:

Have you ever considered the situation if interest rates were to balloon? Then could the bank asked for a review even though a legally binding agreement had been signed???

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Yes, I agree with your sentiments.

The contract protects both parties in this case. It is unreasonable of the borrower to try to inch his way out of the contract. Just follow the terms and if it make sense to pay the penalty (if possible), then weigh the penalty against the savings in interest.

Besides interest rates is not expected to remain so low. When it goes up, can the Bank ask for the contract to be repriced as it is no longer beneficial to the Bank? If yes, then the borrower will scream, "What's a contract for???!!!!"

I had a similiar case with Citibank. Locked in for three years, I had to pay $11500 penalty. So you signed with your eyes open. Its not a trap , all banks are the same. I was lucky, after three years other banks came to me with better loan and interest. So you wait for three years, okay for you.

your title -Cheap MAYBANK home loan rates can be a trap !

so u say that 4-5% for last year is cheap, why u still say its a trap?

u should be happy with your cheap rate.

It's enough to just explain the rationale to the TS. It's not necessary to run him down.

petertok said:

I took up a private residential home loan from MAYBANK 1 year ago when I bought a private property under construction with TOP expectation in 2012.
When I signed up with MAYBANK , loan rates were at almost 4% for the 1st year rising to above 5% in year 3. Since my investment is under progressive payment , my loan quantum of 1,100,000 is not immediately issued to the developer.

Click to expand...

I am sorry. You seem to have not done your homework well. For the past three years, my private housing loan with CITI hovers around 1.8% to 2.2%. I refinanced with CITI in 2007. I am shocked that you took a loan with interest of 4-5%! That's daylight robbery given the generally low interest rates nowadays.