Before making the decision to refinance your home loan, it's crucial to understand the actual numbers involved. These calculation examples will show you exactly how refinancing savings work in real-world scenarios common to Malaysian homeowners.
All examples use current market rates available in 2026. Your actual rate may vary based on your credit profile, property type, and the bank you choose.
Understanding the Refinancing Formula
Monthly Payment Formula:
M = P × [r(1+r)^n] / [(1+r)^n - 1]
M = Monthly Payment
P = Principal (Loan Amount)
r = Monthly Interest Rate (Annual Rate ÷ 12)
n = Total Number of Months (Years × 12)
Don't worry if this looks complicated—use our free calculator for instant results. The key concept is simple: lower interest rate = lower monthly payment = significant savings over time.
Example 1: Refinancing a RM300,000 Loan
Standard Refinance - Same Tenure
BEFORE Refinancing
- Outstanding Loan: RM300,000
- Interest Rate: 4.50%
- Remaining Tenure: 25 years
- Monthly Payment: RM1,667
AFTER Refinancing
- Loan Amount: RM300,000
- New Interest Rate: 3.65%
- Tenure: 25 years
- Monthly Payment: RM1,526
Savings Summary
Monthly Savings
RM141
Yearly Savings
RM1,697
25-Year Savings
RM42,415
Net Savings*
RM37,415
*After deducting estimated refinancing costs of RM5,000
Example 2: Refinancing a RM500,000 Loan
Larger Loan = Bigger Savings
BEFORE Refinancing
- Outstanding Loan: RM500,000
- Interest Rate: 4.75%
- Remaining Tenure: 20 years
- Monthly Payment: RM3,231
AFTER Refinancing
- Loan Amount: RM500,000
- New Interest Rate: 3.65%
- Tenure: 20 years
- Monthly Payment: RM2,938
Savings Summary
Monthly Savings
RM293
Yearly Savings
RM3,512
20-Year Savings
RM70,232
Net Savings*
RM63,232
*After deducting estimated refinancing costs of RM7,000
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Example 3: Cash Out Refinancing
Access Your Home Equity
Scenario:
Property value: RM700,000. Outstanding loan: RM350,000. You want to cash out RM100,000 for home renovation.
BEFORE Refinancing
- Outstanding Loan: RM350,000
- Interest Rate: 4.50%
- Remaining Tenure: 22 years
- Monthly Payment: RM2,091
AFTER Refinancing + Cash Out
- New Loan: RM450,000 (RM350k + RM100k cash out)
- New Interest Rate: 3.75%
- Tenure: 25 years
- Monthly Payment: RM2,314
Analysis:
Monthly payment increases by RM223, but you gain access to RM100,000 at mortgage rates (3.75%) instead of:
- Personal loan: 8-15% per year
- Credit card: 15-18% per year
Interest saved: Approximately RM5,000-10,000 per year compared to personal loan.
Example 4: Shortening Your Loan Tenure
Pay More Monthly, Save Massive on Interest
BEFORE Refinancing
- Outstanding Loan: RM400,000
- Interest Rate: 4.50%
- Remaining Tenure: 25 years
- Monthly Payment: RM2,223
- Total Payment: RM666,999
- Total Interest: RM266,999
AFTER Refinancing (15-year tenure)
- Loan Amount: RM400,000
- New Interest Rate: 3.65%
- New Tenure: 15 years
- Monthly Payment: RM2,889
- Total Payment: RM520,035
- Total Interest: RM120,035
Interest Savings:
RM146,964
Monthly payment increases by RM666, but you save massively on interest and become debt-free 10 years earlier!
Current Bank Rates
These are the current refinancing rates from major Malaysian banks:
Malaysia Bank Refinance Rates 2026
Updated: January 2026
| Bank | Rate From | Best For |
|---|---|---|
 Maybank | 3.65% | Existing customers |
 Public Bank | 3.68% | Salaried employees |
 CIMB | 3.70% | High loan amounts |
 Hong Leong | 3.72% | First-time refinancers |
 RHB | 3.75% | Flexible terms |
* Rates are indicative and subject to change. Please check with the bank for current rates.
Refinancing Costs to Factor In
Refinancing Costs 2026
Updated: January 2026
| Item | Estimated Cost |
|---|---|
| Legal Fees | RM2,000 - RM5,000 |
| Valuation Fees | RM300 - RM1,000 |
| Stamp Duty | 0.5% |
| MRTA/MLTA | Varies |
| Disbursement Fee | RM200 - RM500 |
Break-even Tip: Divide total costs by monthly savings to find your break-even period. Example: RM6,000 costs ÷ RM300 monthly savings = 20 months to break even.
Savings Comparison Table
See potential savings at different loan amounts (comparing 4.5% old rate vs 3.65% new rate, 25-year tenure):
| Loan Amount | Monthly Savings | Yearly Savings | 25-Year Savings |
|---|---|---|---|
| RM200,000 | RM94 | RM1,131 | RM28,277 |
| RM300,000 | RM141 | RM1,697 | RM42,415 |
| RM400,000 | RM189 | RM2,262 | RM56,554 |
| RM500,000 | RM236 | RM2,828 | RM70,692 |
| RM600,000 | RM283 | RM3,393 | RM84,831 |
| RM700,000 | RM330 | RM3,959 | RM98,969 |
| RM800,000 | RM377 | RM4,524 | RM113,108 |
Calculate Your Own Savings
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