OPR is an Overnight Interest Rate by Bank Negara Malaysia(BNM) to determine the interest rate that financial institutions can lend. Since lending is a key component of a bank's business, maintaining a balance between their available cash flow is essential to satisfying the BNM's liquidity criteria.
Overnight interest rates affect your home loan by increasing your interest rate if you pay a slightly higher rate than you would have with a fixed rate and decreasing it if you pay a slightly lower rate than you would have with a fixed rate.
Many homeowners are unaware that the overnight interest rate affects their home loan interest rates.
Overnight interest rate refers to the rate that the borrower is charged for borrowing money secured by a home or other real estate. The rate, which is based on supply and demand, can rise or fall depending on the current interest rate environment.
Interest rates affect the cost of home loans. When interest rates increase, the cost of home loans increases for borrowers.
Similarly, when interest rates decrease, the cost of home loans decreases for borrowers. The interest rate, or the amount of money that borrowers are charged for borrowing money secured by a home or other real estate, is the primary factor that affects the cost of home loans.
Although the OPR has recently increased, it is still reasonable for purchasers or those seeking new home loans. Interested purchasers can negotiate an initial agreement at a reduced interest rate. Although it may not be the lowest it has ever been, but it is still quite acceptable.