Home Loan Review - OCBC Graduated Home Loan

OCBC Graduated Home Loan

OCBC Graduated Home Loan is designed to meet the financing needs of borrowers by servicing lower monthly installments which will gradually increase over the first 5 years in tandem with the borrower's income stream. The installment from 6th year onwards will remain until the rest of the financing tenure. 

Product Features
OCBC Graduated Home Loan is a daily rest interest calculation term loan that comes with the flexibility which allow the borrowers to make prepayment and redrawal of the excess payment made. Redraw is only available upon full release of the loan. This scheme is applicable to graduates who hold a Diploma or Degree with a minimum age of 21 and maximum entry age of 35 years. The applicants must either be with the same employer for 1 year or have been working for at least 2 years. For joint applications, at least one of the applicants must be a graduate in order to qualify for the OCBC Graduated Home Loan. 

OCBC - Interest Rates Option - NZEC (As at 30.04.2008)

Fixed Rates

3 Years Fixed Rate: 4.88% (Yr 1 - 3), BLR - 1.55% (Thereafter)

5 Years Fixed Rate: 5.68% (Yr 1 - 5), BLR - 1.55% (Thereafter)

Variable Rates

BLR - 2.00% (Yr 1 - 3), BLR - 1.75% (Thereafter)

OCBC - Interest Rates Option - ZEC (As at 30.04.2008)

Fixed Rates

3 Years Fixed Rate: 5.88% (Yr 1 - 3), BLR - 1.55% (Thereafter)

5 Years Fixed Rate: 6.18% (Yr 1 - 5), BLR - 1.55% (Thereafter)

Variable Rates

BLR - 1.50% (Yr 1 - 3), BLR - 1.65% (Thereafter

OCBC Graduated Home Loan provides 90% margin of finance for all landed properties and 80% margin of finance for non-landed properties except for the following locations - Wilayah Persekutuan, Petaling Jaya and Penang Island, which is at 90% margin of finance. It also offers different packages; giving the borrowers the choice of variable and fixed rates packages. The package comes with the option of Non-Zero Cost (NZEC) package and Zero Cost (ZEC) package that covers legal fees, stamp duties, disbursements and valuation fees in connection with the loan. The minimum loan amount for the OCBC Graduated Home Loan, ZEC package is RM100,000.

For completed properties, the minimum loan tenure is 5 years and maximum loan tenure is 40 years or up to age 70, whichever is earlier. For under construction properties, the minimum loan tenure is 5 years and maximum loan tenure is 36 years or up to age 70, whichever is earlier. OCBC uses the debt-to-service ratio (DSR) whereby Employees Provident Fund (EPF) and taxes are deducted from the borrower’s gross salary. The housing loan must not exceed 40% of the borrower's nett income. 

For the NZEC package - If the facilities are redeemed within the first 5 years of the loan, there prepayment charge is 3% of the amount prepaid (including capital repayments) and the outstanding amount redeemed or RM 5,000, whichever is higher.

For the ZEC package – If the facilities are redeemed within the first 5 years from the loan, the prepayment charge is 3% of the amount prepaid (including capital repayments), and the outstanding amount redeemed or RM 5,000, whichever higher + Administration Fees (as listed below).

Admin Fees : Loan Amount
RM 05,000 : Up to RM 500,000
RM 10,000 : RM 500,000 & up to RM 1,500,000
RM 15,000 : RM 1,500,000

What's good about it?
OCBC Graduated Home Loan is a term loan that commensurates with the borrower's earning capacity. It provides a graduated monthly repayment scheme with lower monthly installments for the first 5 years and longer loan tenure (up to 40 years or when the applicant turns 70, whichever is earlier). 

The affordable start-up repayments is useful for applicants who are earning lower income in their initial years of their career as they will service lower monthly installments, hence making it more affordable. The repayment structure frees up cash for home-buyers in the first 5 years of buying their property. With low monthly installments, borrowers can use the extra funds to renovate their new home, or buy new furniture. 

With the built-in flexible repayment feature, borrower can make capital repayments even during the low initial monthly installment of the first 5 years. No notice is required and no penalty charged.

Limitation
To qualify for the OCBC Graduated Home Loan, applicants must have at least a recognized diploma. Also, applicants' age must be 35 years and below.

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