Frequencies ask question (FAQ) for Hong Leong Mortgage Plus

1. What is Hong Leong Mortgage Plus(HL Mortgage Plus)?
Hong Leong Mortgage Plus is a mortgage product that combines a term loan with transactional freedom of a current account.

2. Does it mean that I have to open two types of accounts for HL Mortgage Plus?
Yes. For every HL Mortgage Plus account, you shall open/maintain the following accounts with HLB:-
(I) a HL Mortgage Plus loan account (term loan)
(II) a non-interest bearing current account which is linked to (I) above.

3. How does Hong Leong Mortgage Plus works?
Hong Leong Mortgage Plus link your loan account directly to your Mortgage Plus current account, whereby the credit balance in your current account will automatically help to give you greater savings on interest.

4. Please show me how interest is computed and the difference between a conventional term mortgage loan to HL Mortgage Plus?

A simple illustration
Based on the following assumption:-
· Loan outstanding balance: RM500,000 (debit)
· Current account available balance: RM80,000 (credit)
· Interest rate: 6.75% p.a.
· Daily rest basis
· No change to the loan & current account position for 30 days (a month)
Workings on Interest computed for 30 days:-

Conventional Type
500,000 x 6.75% x 30/365
RM2773.97

Hong Leong MortgagePlus
(500,000 less 80,000)
x 6.75% x 30/365
RM2330.13

5. How much do I save when comparing a traditional/conventional mortgage loan type to a HL Mortgage Plus type? Show me.
As per above illustration:-
Interest savings:
RM2,773.97 less RM2,330.13 = RM443.84 /month.

6. What are the key benefits of Hong Leong Mortgage Plus?
Cost savings on interest – With the concept in (3) and as illustrated in (4) above, whenever you deposit or save into your current account, your loan interest will be reduced.
Ability to pay-off loan faster – With lower interest cost payable, the loan tenure will be shorten, thus allowing you to own your home sooner.
Flexibility - Make extra payments and withdraw from your current account without having to apply or worry on unnecessary charges or penalties.
Accessibility – Easy access to funds in your current account via branch, cheque book, ATM and internet banking
Convenience – Manage all your banking transactional needs and at the same time optimize on interest savings when you consolidate your funds into one account.

7. Other than the cost savings on interest, how else do I benefit from HL Mortgage Plus? Will the mortgage loan tenure be affected?
When you pay less interest for an installment, more of your loan principal will be paid off. This will result in your mortgage loan tenure shorten.

8. Will it be more beneficial to leave my savings in FD to earn interest or transfer the amount to Mortgage Plus current account?
With HL Mortgage Plus loan, you’ll be savings on higher rate if the rate chargeable on loan is higher than FD rates.

Please see illustration below:-
Traditional housing loan
Housing loan RM500,000 x 6.75% p.a. = RM 33,750
Fixed deposit RM 80,000 x 3.70% p.a. = RM 2,960
—————————————————————————-
Net annual interest payable = RM30,790
HL Mortgage Plus
Mortgage Plus account RM500,000
Current account bal account RM 80,000
—————————————————————————-
Integrated bal for
Interest computation RM420,000
Net annual interest payable = RM420,000 x 6.75%
= RM28,350
Difference (annual interest payable) =
RM 30,790 – RM28,350 = RM2,440
(Note: Above workings are for illustration purpose only. Workings are built on simple assumption of loan amt of RM500,000 calculated at loan rate of 6.75% while FD rate is on 3.70%)

9. Who is eligible to apply for HL Mortgage Plus?
An individual
Age 18 years and above
Income requirements: 3 times monthly repayment
Minimum loan amount of RM100,000

10. What about sole-proprietor, partnership & corporates? Can these entities apply for HL Mortgage Plus?
No, as HL Mortgage Plus applies to individuals only.

11. Will I be assigned with two different account numbers and how do I repay the mortgage loan?
Yes. You will be assigned with two different account reference. One for your Mortgage Plus loan and the other for your Mortgage Plus current account.
For repayment of loan, you have to sign up Standing Instructions on your current account to automate the transfer of interest / installment / maintenance fee from you current account to your mortgage loan account.

12. What is my initial opening amount for the current account?
Initial amount for opening of account is RM500.

Blog RSS
Subscribe to Full Feed RSS or via Email subscriptions!
Subscribe to the post Comments Feed or Link to this post by Leaving a Trackback