How the OPR Affects Your Home and Personal Loans
When BNM raises or lowers the Overnight Policy Rate, how exactly does it impact your monthly installments?
The Ripple Effect of the OPR
The Overnight Policy Rate (OPR) is the interest rate at which banks lend money to one another. Set by Bank Negara Malaysia (BNM), it serves as the benchmark for all commercial interest rates in the country.
Impact on Variable Rate Loans
Most home loans are variable (pegged to the Base Rate or SBR). When the OPR increases by 0.25%:
- Your bank's Base Rate increases by 0.25%.
- Your monthly home loan installment will increase (typically by RM30 to RM60 per RM100k borrowed).
- Conversely, if the OPR drops, your monthly commitment drops, freeing up cash flow.
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