Stocks Investing – My Road to Wealth & to Help People

Bank Negara reduces the OPR to 3.25. It seems that our economy is slowing down. But it is quite weird that our newspapers dont mention about the current economic situation. As I know lots of people has been laid off especially in manufacturing sector. If not mistaken around 20,000++ people.

What is the impact to me when Bank Negara reduces the OPR?

1) I got one mortgage with BLR. So I pay less interest to the mortgage.

Currently my interest is 7.10% (BLR + 0.35%) with RM137k of mortgage.

So basically I am paying interest per month of = RM137k x 7.10% / 12 = RM810.58

Lets say BLR reduced by 0.25%, my new monthly interest = RM137k x 6.85% / 12 = RM782.04

I save on interest = (810 – 782) / 810 = 3.45% (or RM28 per month and RM336 per year).

Not bad i can save RM336 per year or 3.45%. This not include the gain i get by reducing my principal faster.

This is a simplistic calculation.

2) Less income for the banks. My stocks portfolio are all banks. So I think it will affect a bit on the dividend.

By how much? I don’t know.