Thursday, July 16, 2009

OCBC uses Mortgage Lending Rate instead of BLR

Its not new actually, CIMB has been using Base Finance Rate instead of Base Lending Rate (BLR) as well. OCBC starts to use MLR as in Mortgage Lending Rate (MLR) instead of BLR.

The concepts put forward is really interesting. BLR consists of cost consideration of the whole banking industry and operations. While MLR is calculated for mortgage related costs only. Hence MLR is usually lower than BLR.

But if you really put the numbers together, you may realize its just another looks-good but pratically almost everything stays the same. For example, the typical BLR in the market now is 5.5% and the common offer is BLR - 2.2% so
BLR 5.5% - 2.2% = 3.3%
While MLR is lower at 4.7%, their offer is MLR - 1.3%
MLR 4.7% - 1.3% = 3.4%
Doesn't look like there is a whole lot of difference isn't it ? Not to mention the lowest BLR at 5.25% and the best offer of BLR - 2.3%

OCBC folks or anyone more well verse in housing loans please do leave comment if this is not entirely true.

1 comment:

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