Iskandar properties loan in Ringgit or SGD?

[klarklar]

When Singaporeans buy Malaysian properties, are the mortgage loan usually in Ringgit or SGD? Do they pay interest in Ringgit or SGD?

Worried about fellow Singaporeans will be hit by this approaching financial crisis. Do Singaporeans borrow from Singaporean banks or Malaysian banks?

 

[Shiny Things]

When Singaporeans buy Malaysian properties, are the mortgage loan usually in Ringgit or SGD? Do they pay interest in Ringgit or SGD?

Worried about fellow Singaporeans will be hit by this approaching financial crisis. Do Singaporeans borrow from Singaporean banks or Malaysian banks?

I'm going to guess that at least a few have taken out loans in SGD (because the interest is cheaper, right?!), which they're rapidly finding out is not a good idea.

Here's the deal - always, always match the currency of your assets and your liabilities. Otherwise if the currency of your assets starts tanking - like ringgit is doing now - your bank is totally within their rights to call you up and demand that you post more collateral for the loan. And if you don't, they'll foreclose and take the house.

I've told this story before on here, but this happened to a bunch of friends of mine back in 2008. They all bought houses in Australia (where mortgage rates were 7-9%) with mortgages in SGD (where rates were 3-ish%), and thought they were heroes... until AUDSGD dumped from 1.20 to 0.90 in the space of a few weeks, and they started getting calls from their banks saying "you've got two weeks to post a quarter million dollars cash collateral or we're going to foreclose on that nice beachside house in Sydney".

Don't ever, ever, EVER let that happen to you.

 

[OngHuatHuat]

When Singaporeans buy Malaysian properties, are the mortgage loan usually in Ringgit or SGD? Do they pay interest in Ringgit or SGD?

Worried about fellow Singaporeans will be hit by this approaching financial crisis. Do Singaporeans borrow from Singaporean banks or Malaysian banks?

Own 3 Malaysia properties currently, one in petaling jaya, 2 at nusajaya(ie iskandar zone b).

Don be over concerned about the 4.45 % to 4.65 % interest rate on ringgit. It is a weak currency. Just loan max at 85- 90 % in ringgit.

Inflation back in Malaysia will drive property price up and depreciation in ringgit help to reduce monthly repayment.

 

[mummy1234]

I took out a SGD equity loan at low interest rate to pay for my JB house....though the ringgit has fallen but the property appreciated so I think breakeven if I sell now but the thing is, I probably will keep it for retirement so it is paper losses even if value falls in future. Good thing it is freehold so that helps it appreciate in RM terms over time and hopefully, we can keep it for future generations...

But now they are coming up with international zone for foreigners and can only buy leasehold and landed above 2 mil rm, so I thing it is going to get more difficult for foreigners to own a freehold landed property there...In SEA, I think they are the only country that allows it and now that is going to change soon.

 

[NewInvestor]

I took out a SGD equity loan at low interest rate to pay for my JB house....though the ringgit has fallen but the property appreciated so I think breakeven if I sell now but the thing is, I probably will keep it for retirement so it is paper losses even if value falls in future. Good thing it is freehold so that helps it appreciate in RM terms over time and hopefully, we can keep it for future generations...

But now they are coming up with international zone for foreigners and can only buy leasehold and landed above 2 mil rm, so I thing it is going to get more difficult for foreigners to own a freehold landed property there...In SEA, I think they are the only country that allows it and now that is going to change soon.

I am just wondering aloud here. If that new regulation is passed, does that mean that you would not be able to sell your house to foreigners (assuming, for some reason or the other, you wanted to sell)?

 

[mummy1234]

I am just wondering aloud here. If that new regulation is passed, does that mean that you would not be able to sell your house to foreigners (assuming, for some reason or the other, you wanted to sell)?

Actually, I am not sure about that as though my area is in one of the international zone proposed ie. Tebrau but the leasehold thing makes it complicated. Hopefully, I can sell as leashold then my descendants take it back when the lease is up? But then, do they need to be Malaysians?

But can still sell as freehold to Malaysians, SPRs and rich Bumis...

 

[OngHuatHuat]

I am just wondering aloud here. If that new regulation is passed, does that mean that you would not be able to sell your house to foreigners (assuming, for some reason or the other, you wanted to sell)?

As far as I know, they will impose some restriction on total number of properties that are allowed to be purchased by foreigners outside international zone.
Within international zone, there will be no limitation. But I believe the price within the international zone will be sky high, low occupancy and hard to rent out.

 

[mummy1234]

As far as I know, they will impose some restriction on total number of properties that are allowed to be purchased by foreigners outside international zone.
Within international zone, there will be no limitation. But I believe the price within the international zone will be sky high, low occupancy and hard to rent out.

At least 2 mil rm for landed in future for foreigners....in that case my property huat, more than doubled from 2 years ago....

 

[OngHuatHuat]

At least 2 mil rm for landed in future for foreigners....in that case my property huat, more than doubled from 2 years ago....

Landed will eventually huat d. But need time. I don think it will jump though. Coz the sentiment still relatively weak.
You have to wait till those properties inside international
Zone rises up till 2 million first.

 

[mummy1234]

Landed will eventually huat d. But need time. I don think it will jump though. Coz the sentiment still relatively weak.
You have to wait till those properties inside international
Zone rises up till 2 million first.

My hubby is the one keen to sell after 5 years when there is no rpgt....he will be happy if can sell above 2mil rm in 2018. Agents had said it was valued at about 1.2 to 1.4 mil rm 1 year ago, dunno about now....the original owners bought it for about 400 k rm in 2005 I think....

 

[zoossh]

My hubby is the one keen to sell after 5 years when there is no rpgt....he will be happy if can sell above 2mil rm in 2018. Agents had said it was valued at about 1.2 to 1.4 mil rm 1 year ago, dunno about now....the original owners bought it for about 400 k rm in 2005 I think....

how much did u have to pay for overall for this house?

u r keeping for retirement, so in the meanwhile do u rent it out, and if the house nobody is staying now, how much more do u have to pay to ensure security guard ensure your house dun get broken in by thieves?

 

[OngHuatHuat]

My hubby is the one keen to sell after 5 years when there is no rpgt....he will be happy if can sell above 2mil rm in 2018. Agents had said it was valued at about 1.2 to 1.4 mil rm 1 year ago, dunno about now....the original owners bought it for about 400 k rm in 2005 I think....

Now most of the iskandar properties sell below bank valuations.
You have to wait till the overall sentiment turn positive then can sell a good price.
For me I am waiting for the developers to stop building and let market fully absorb existing stocks first. As long as you have the ability to hold, just pay the wait game. Inflation will do us a big favor back in Malaysia. Malaysian government quite weak in stemming inflation.

But yours is sgd equity loan, so it adds on to a bit more complication, coz you do not benefit from depreciating ringgit.
But you still can strategize your fund in such a way that you always use ringgit to do investment in Malaysia.

 

[mummy1234]

how much did u have to pay for overall for this house?

u r keeping for retirement, so in the meanwhile do u rent it out, and if the house nobody is staying now, how much more do u have to pay to ensure security guard ensure your house dun get broken in by thieves?

We bought it for 950k rm orS$ 380k as exchange rate was 2.48 at that time but on 100% equity loan against our Sg terrace which had doubled in value from 1.1 mil to 2mil in 3 years, enabling us to takeout an equity loan. We paid cash in instalment so far of less than S$10k for the instalment and is rented out now for rm2500, maintenance is 130rm per mth, property tax and quit rent less than 1000rm per year. Though rental does not fully cover the mthly instalment but our passive income from our 1+1 condo unit in Sg helps to cover it.

 

[mummy1234]

The good thing about taking a 100% equity loan is that I dun have to come up with any cash of my own compared to taking a My loan which means I have to come up with 10% or 20% cash...so full leveraging and tenants help me pay off my loan mostly....

 

[Kissmequick]

I'm going to guess that at least a few have taken out loans in SGD (because the interest is cheaper, right?!), which they're rapidly finding out is not a good idea.

I've told this story before on here, but this happened to a bunch of friends of mine back in 2008. They all bought houses in Australia (where mortgage rates were 7-9%) with mortgages in SGD (where rates were 3-ish%), and thought they were heroes... until AUDSGD dumped from 1.20 to 0.90 in the space of a few weeks, and they started getting calls from their banks saying "you've got two weeks to post a quarter million dollars cash collateral or we're going to foreclose on that nice beachside house in Sydney".

Don't ever, ever, EVER let that happen to you.

You must be referring to this period in the chart

My apologies to go off track on the subject of this thread; but if I may prick your brain, I am puzzled as to why the SGD dollar is relatively strong viz a viz against most of the currencies. As with the AUD we are close to where we were before at par; what is your take on the AUD.SGD going forward? Do you think this is a good level to invest for yield and longer term (like 5 years and more?)

Thank you

 

[Kissmequick]

The good thing about taking a 100% equity loan is that I dun have to come up with any cash of my own compared to taking a My loan which means I have to come up with 10% or 20% cash...so full leveraging and tenants help me pay off my loan mostly....

You may have missed out the possibility of the following events happening:

1) The bank may revalue the property in MY and if the new valuation is lower than the original purchase price, ie RM950K (S$380K), you will be asked to top up the difference.

2) With the current exchange rate of SGD/MYR approaching 2.97, there is a possibility that the bank may request for a TOP UP. Because even if your property is worth RM950K, it is only worth SGD 320K in their books. So, there is a shortfall of SGD60K from your original loan of SGD 380K simply based on the exchange rate.

I am just helping you to ''see'' the risks involved in your investments, but from your postings i gathered you must be well off, so I reckon your margin of safety is in the comfortable zone.

 

[chuanz]

You may have missed out the possibility of the following events happening:

1) The bank may revalue the property in MY and if the new valuation is lower than the original purchase price, ie RM950K (S$380K), you will be asked to top up the difference.

2) With the current exchange rate of SGD/MYR approaching 2.97, there is a possibility that the bank may request for a TOP UP. Because even if your property is worth RM950K, it is only worth SGD 320K in their books. So, there is a shortfall of SGD60K from your original loan of SGD 380K simply based on the exchange rate.

I am just helping you to ''see'' the risks involved in your investments, but from your postings i gathered you must be well off, so I reckon your margin of safety is in the comfortable zone.

The equity loan is against the Sg property so nothing to do with MY property. The bank wouldn't ask for a margin top up unless the Sg property devalues.

 

[SpeedingBullet]

You must be referring to this period in the chart

My apologies to go off track on the subject of this thread; but if I may prick your brain, I am puzzled as to why the SGD dollar is relatively strong viz a viz against most of the currencies. As with the AUD we are close to where we were before at par; what is your take on the AUD.SGD going forward? Do you think this is a good level to invest for yield and longer term (like 5 years and more?)

Thank you

Alamak, forex is not for investing lah!

Fundamentals of the aussie: it's backed by commodities, and it tracks China's economic strength cos China consumes copious amounts of commodities.

If China slows = AUD down
If commodities prices crash = AUD down

 

[cscs3]

I am just wondering aloud here. If that new regulation is passed, does that mean that you would not be able to sell your house to foreigners (assuming, for some reason or the other, you wanted to sell)?

In the first place, iskandar gas so many new development. So unless the location is something die die must get. I would go for new one vs 2nd hand.

 

[henrylbh]

You may have missed out the possibility of the following events happening:

1) The bank may revalue the property in MY and if the new valuation is lower than the original purchase price, ie RM950K (S$380K), you will be asked to top up the difference.

2) With the current exchange rate of SGD/MYR approaching 2.97, there is a possibility that the bank may request for a TOP UP. Because even if your property is worth RM950K, it is only worth SGD 320K in their books. So, there is a shortfall of SGD60K from your original loan of SGD 380K simply based on the exchange rate.

I am just helping you to ''see'' the risks involved in your investments, but from your postings i gathered you must be well off, so I reckon your margin of safety is in the comfortable zone.

The way I "see" is she took a Sgd loan against her Sg property. In other words her property in My is fully paid. If she had taken My loan, the declining forex would have lessen her monthly instalments.