Professional Documents
Culture Documents
FM Final Draft
FM Final Draft
CS112
DIPLOMA IN ACTUARIAL SCIENCE
FINANCIAL MATHEMATICS
ASC 303
GROUP MEMBERS:
NAME STUDENT ID
MUHAMMAD FAIZUDDIN BIN MUHAMMAD TAUFIQ 2021838346
AMIEN HUWAYDY BIN ABDUL RAHMAN 2021885254
MUHD ANIQ ARIFF NAZHAN BIN MOHD RIHAN 2021861276
MUHAMMAD HAFIZZUDIN BIN HAZMI 2021818484
PREPARED FOR:
Amni is a Human Resource Executive at Petronas Carigali Berhad with a monthly salary of
RM 7,000. She is planning on buying a two stories house at Taman Melawati, Selangor. The
house is currently selling at RM900,000. She is willing to pay 10% out of the cash value as
her deposit for the house. The balance will be financed through a housing loan with a tenant
period of 30 years. To execute this plan, Amni has come to you for a financial consultation.
These are her concerns:
1. What are the two available housing loans you would suggest to Amni?
2. What is the amount of monthly instalment Amni has to pay under both loans?
3. Please prepare the amortisation schedules for the first 5 years for both loans using
Microsoft Excel.
4. What is the 45th interest payment under both loans?
5. If Amni were to settle her loan in a lump sum amount after 10 years, what her outstanding
balance would be under both loans?
6. Based on all information above, which loan is the best for Amni?
TABLE OF CONTENT
9.0 Conclusion11
1.0 Introduction
House loans, often called as mortgage is a contract that is made between the borrower
(customer) and the lander which can be either the bank or any financial institution. This
contract explains how the lender provides a sum of money also called as loan for the
borrower to purchase any types of residence whether it is a primary, secondary or and
investment residence. House loans are commonly paid in the time span of 10, 20 or even 30
years. This is because most properties cost around few hundreds of thousands and in the
city it might even reach to couple of millions. Majority are unable to pay this in lump sum,
thus, the existence of house loans is a necessity to ensure that the people will have a home
and the rate of unemployed is decreased.
Numerous achievements are important in a person’s life, buying the first house could
be one of the greatest success an adult can achieve. However, we all know how purchasing
a house is not an easy task unless you are born with the proper wealth. As said above, a
house loan is the factor that allow most people to purchase the house they are comfortable
with. Although, we must be aware of our financial status when we want to purchase the most
suited house for us as an unnecessary overspending on a house loan can lead us to
poverty. Despite how stressful and overwhelming the process is, the decision of buying a
house loan must take days or even weeks to ensure that we are able to finance it and at the
same time live a comfortable life without worrying about our financial status. Hence,
consultation from experts is also necessary as it can provide us with the proper knowledge
to manage our finance when we are purchasing the house loans.
1
2.0 History of the Companies
The oldest bank in Singapore, OCBC Bank, was established in 1912 and is the country's
longest-running financial institution. It is currently the second-largest financial services group
in Southeast Asia by assets and one of the best-rated banks in the world, having ratings of
AA- by Fitch and S&P and Aa1 by Moody's. OCBC Bank, which is renowned for its
soundness and stability, has been crowned the Best Managed Bank in Singapore by The
Asian Banker and has constantly been listed among the World's Top 50 Safest Banks by
Global Finance. Offering consumer, corporate, investment, private, and specialized financial
services, OCBC Bank and its subsidiaries also provide wealth management services and
transaction banking to treasury, insurance, asset management and stockbroking services.
The major markets for OCBC Bank are Greater China, Singapore, Malaysia,
and Indonesia. In 19 different nations and regions, it has more than 470 branches
and representative offices. These include around 230 branches and offices in
Indonesia operated by Bank OCBC NISP's subsidiary, over 70 in Mainland China,
Hong Kong Special Administrative Region, and Macau Special Administrative Region
operated by OCBC Wing Hang. Great Eastern Holdings, an insurance division of
OCBC Bank, is the oldest and most reputable provider of life insurance in Malaysia
and Singapore. One of the biggest private asset management firms in Southeast Asia
is its asset management affiliate, Lion Global Investors.
Based in Kuala Lumpur OCBC Bank (Malaysia) Berhad established OCBC Al-
Amin Bank Berhad (OCBC Al-Amin) in 2008 to expand the Bank's efforts in Islamic
banking, more than ten years after the Bank first began providing Shariah-compliant
banking products and services in 1995. OCBC Al-Amin is a wholly owned subsidiary
of OCBC Bank (Malaysia) Berhad. OCBC Al-Amin adheres sternly to the teachings of
Islam while providing a wide range of competitive and creative financial products and
services, from consumer to corporate, treasury, investment, and transaction banking,
for both Muslims and non-Muslims. The global headquarters of the OCBC Group, of
which OCBC Al-Amin is a part, is in Singapore. Singapore, Malaysia, Indonesia, and
Greater China are the Group's top markets.
2
In addition to OCBC Bank's broad network, OCBC Al-Amin aims to provide its
clients with top-notch Islamic financial services. These services include private
banking, asset management, and takaful.
Malayan Banking Berhad is the holding company overseeing Malaysia's largest bank,
Maybank, and a range of financial sector subsidiaries. Maybank offers a full range of
commercials, corporate, and private banking services, with a network of more than 450
branch offices and more than 2,500 ATM machines. Maybank, as the group is more
commonly known, has also built a strong position in the regional market. The company
operates more than 20 branches in Singapore and the Philippines and also has a banking
presence in most of the other Southeast Asian markets, including Brunei, Papua New
Guinea, Indonesia, and Vietnam. The bank also operates branches in New York and
London. Maybank was the first Malaysian bank granted the right to establish a branch office
in China, a particularly important market given the large and economically powerful ethnic
Chinese population in Malaysia.
Maybank was founded by Malaysian business tycoon Khoo Tech Puat, who
died in 2004. The company has been led, however, for some two decades by
President and CEO Amirsham A. Aziz. from 1994 until March 2008 after which he
was appointed Minister in the Prime Minister's Department in-charge of the Economic
Planning Unit, a post he held until April 2009. Tan Sri Abdul Wahid Omar was
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President & CEO of Maybank Group from May 2008 to June 2013. On 1 May 2022,
Dato' Khairussaleh Ramli was appointed as President & CEO of Maybank Group.
4
3.0 Housing loans for both companies
- No lock-in period
No penalty charged on early
settlement.
5
getting your mortgage by the owner under the Bai’
including zero moving cost (sale and purchase of
such as MRTA premium, completed asset) or Bai’
legal fees, and valuation Istisna’ (sale and purchase
fees, into the total loan of under construction asset)
financing package. contract.
6
5.0 Amortisation Schedules
7
38 3700.263537 2308.642037 1391.6215 759971.3852
39 3700.263537 2304.422294 1395.841243 758575.5439
40 3700.263537 2300.189756 1400.073781 757175.4701
41 3700.263537 2295.944384 1404.319153 755771.151
42 3700.263537 2291.686139 1408.577398 754362.5736
43 3700.263537 2287.414982 1412.848555 752949.725
44 3700.263537 2283.130874 1417.132663 751532.5924
45 3700.263537 2278.833775 1421.429762 750111.1626
46 3700.263537 2274.523646 1425.739891 748685.4227
47 3700.263537 2270.200448 1430.063089 747255.3596
48 3700.263537 2265.864141 1434.399396 745820.9602
49 3700.263537 2261.514686 1438.748852 744382.2114
50 3700.263537 2257.152041 1443.111496 742939.0999
51 3700.263537 2252.776168 1447.487369 741491.6125
52 3700.263537 2248.387026 1451.876511 740039.736
53 3700.263537 2243.984576 1456.278962 738583.457
54 3700.263537 2239.568775 1460.694762 737122.7623
55 3700.263537 2235.139586 1465.123952 735657.6383
56 3700.263537 2230.696965 1469.566572 734188.0718
57 3700.263537 2226.240874 1474.022663 732714.0491
58 3700.263537 2221.77127 1478.492267 731235.5568
59 3700.263537 2217.288114 1482.975423 729752.5814
60 3700.263537 2212.791364 1487.472173 728265.1092
8
15 4037.877078 2887.183694 1150.693384 793170.3801
16 4037.877078 2883.001175 1154.875903 792015.5042
17 4037.877078 2878.803453 1159.073625 790856.4306
18 4037.877078 2874.590473 1163.286605 789693.144
19 4037.877078 2870.362181 1167.514898 788525.6291
20 4037.877078 2866.118519 1171.758559 787353.8706
21 4037.877078 2861.859432 1176.017646 786177.8529
22 4037.877078 2857.584865 1180.292213 784997.5607
23 4037.877078 2853.29476 1184.582318 783812.9784
24 4037.877078 2848.989062 1188.888016 782624.0904
25 4037.877078 2844.667714 1193.209364 781430.881
26 4037.877078 2840.330658 1197.54642 780233.3346
27 4037.877078 2835.977838 1201.89924 779031.4353
28 4037.877078 2831.609197 1206.267881 777825.1675
29 4037.877078 2827.224677 1210.652401 776614.5151
30 4037.877078 2822.82422 1215.052859 775399.4622
31 4037.877078 2818.407768 1219.46931 774179.9929
32 4037.877078 2813.975263 1223.901815 772956.0911
33 4037.877078 2809.526647 1228.350431 771727.7406
34 4037.877078 2805.061861 1232.815217 770494.9254
35 4037.877078 2800.580847 1237.296231 769257.6292
36 4037.877078 2796.083545 1241.793533 768015.8357
37 4037.877078 2791.569897 1246.307181 766769.5285
38 4037.877078 2787.039843 1250.837236 765518.6912
39 4037.877078 2782.493322 1255.383756 764263.3075
40 4037.877078 2777.930276 1259.946802 763003.3607
41 4037.877078 2773.350645 1264.526433 761738.8343
42 4037.877078 2768.754367 1269.122711 760469.7115
43 4037.877078 2764.141383 1273.735695 759195.9758
44 4037.877078 2759.511632 1278.365446 757917.6104
45 4037.877078 2754.865053 1283.012025 756634.5984
46 4037.877078 2750.201584 1287.675494 755346.9229
47 4037.877078 2745.521165 1292.355913 754054.567
48 4037.877078 2740.823733 1297.053345 752757.5136
49 4037.877078 2736.109228 1301.767851 751455.7458
50 4037.877078 2731.377586 1306.499493 750149.2463
51 4037.877078 2726.628745 1311.248333 748837.9979
52 4037.877078 2721.862644 1316.014434 747521.9835
53 4037.877078 2717.079219 1320.79786 746201.1857
54 4037.877078 2712.278407 1325.598671 744875.587
55 4037.877078 2707.460145 1330.416933 743545.1701
56 4037.877078 2702.62437 1335.252708 742209.9173
57 4037.877078 2697.771018 1340.10606 740869.8113
58 4037.877078 2692.900025 1344.977053 739524.8342
59 4037.877078 2688.011327 1349.865751 738174.9685
60 4037.877078 2683.104859 1354.772219 736820.1963
9
6.0 45th Interest Payment for both Companies
10
because they need the money
in a short period of time. The
privilege of someone to hold a
huge
amount of money is not getting
by everyone, which the loan
will take place. Loans cover in
a
wide aspect which are
purchasing automobile,
pursuing study and so on. In
this study, we focus
more on house loan which
there are many characters to
consider in order to meet the
customer’s
11
satisfaction. House loan will
help to adjust with the current
financial state that will the
customer
can access more easier into the
process of the loan.
The need of getting a loan to
settle a financial problem
might be necessary to the
people
because they need the money
in a short period of time. The
privilege of someone to hold a
huge
amount of money is not getting
by everyone, which the loan
12
will take place. Loans cover in
a
wide aspect which are
purchasing automobile,
pursuing study and so on. In
this study, we focus
more on house loan which
there are many characters to
consider in order to meet the
customer’s
satisfaction. House loan will
help to adjust with the current
financial state that will the
customer
can access more easier into the
process of the loan
13
8.0 Selection of the Best Loan
After thorough discussion and numerous research regarding the comparison between
MaxiHome Flexi (Maybank) and Manarat Home- i (OCBC Al-Amin), we have agreed to
suggest Amni MaxiHome Flexi by Maybank as the loan to finance her purchase for the two-
storey house. We have taken account the information provided which are Amni working as
Human Resource Executive at Petronas Carigali Berhad with a monthly salary of RM7,000.
The house she wishes to buy cost RM900,00 and she is willing to make the down payment
10% of the house’s original value and the remaining value of the house, which is RM810,000
will be financed into the MaxiHome Flexi loan with a tenant period of 30 years.
Firstly, the main reason on why we chose MaxiHome Flexi is because this product
has a higher loan margin which is up to 95% of the value of the house including
capitalization of related expenses such as MRTA premium. This will ensure that Amni face
no difficulty in paying the down payment for her house as she has decided to pay 10% of the
house original value as the down payment. If ever Amni decides to change her mind and
increase the amount down payment to avoid higher interest payment that needed to be paid,
she will find no hurdles in increasing it as the loan margin is up to 95%. In addition, this
mortgage includes zero moving cost such as MRTA premium, legal fees, and valuation fees,
into the total loan financing package, thus the down payment can be decreased to ensure
that Amni is not required to use more of her savings to pay the other factors that may be
charged by other banks of financial institutions. This shows how the total down payment
including other charges made by Amni will be lower in MaxiHome Flexi (Maybank) compared
to Manarat Home- i (OCBC Al-Amin).
Next, this product has the flexibility to redraw in advance or additional payments
made in excess of the normal monthly repayment amount. This allow Amni to pay an excess
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payment which means you pay more than the usual or the minimum monthly payment that
she initially agreed on the contract. This will help Amni in reducing the total interest payment
paid by her as she decides to pay a larger amount monthly that will reduce the tenure as she
is able to repay the total loan she borrowed quicker. Moreover, the money accumulated by
her through the monthly payments can be withdrawn if she ever need some extra cash for
an urgent matter. This will surely benefits Amni if she ever face any difficulties such as
health issues, unpaid debts, accidents and other factors that require urgent extra cash.
Lastly, the information, requirements, and the benefits are easily noticed as it is documented
to simplest it can be, this will help Amni in identifying her rights and the flexibility she has if
she proceed with MaxiHome Flexi (Maybank). Through all of the reasons given above, we
conclude that MaxiHome Flexi (Maybank) is the best product for Amni as it provides more
benefits and flexibility to her as she is unfamiliar with the purchases of loans.
9.0 Conclusion
The need of getting a loan to settle a financial problem might be necessary for people
because they need the money in a short period. However, not everyone could afford a
significant amount of money. That’s why a loan is provided. Loans can be used for a variety
of things such as buying a car and future our study. In this study, we put a greater emphasis
on home loans, which have a variety of factors to be taken into consideration to satisfy
customers. Among the factors emphasized in this study are the monthly installments that
customers should pay, total interest to receive, customers’ outstanding balance, and so on.
A home loan will help the consumer to adjust their current financial situation so they may
begin the loan application procedure easily.
As previously said, the main purpose of this study is to ensure that Amni
receives a house loan that is appropriate and advantageous to her. In this study, we
suggest Amni choose MaxiHome Flexi Loan from Maybank over Manarat Home- i by
OCBC Al-Amin. This choice is preferable in several situations such as she will only
have to make a lower monthly payment on the Maybank loan. So, the purchase of
this loan will not put a burden on Amni as she can pay for it based on her monthly
salary. Next, it became clear through a comparison of the interest rates supplied by
the MaxiHome Flexi Loan and Manarat Home-i that the former is more affordable.
From the rates given, it is clear that Amni won't need to access a lot of money under
this plan to pay for the total interest payment if she chooses the MaxiHome Flexi
Loan.
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Moreover, if Amni decided to settle her loan in a lump sum amount after 10
years, it has shown that her outstanding balance is lower with MaxiHome Flexi Loan
compared to Manarat Home-i. Hence, the total amount needed to be paid by her in
lump sum will be lower compared to Manarat Home- i by OCBC Al-Amin. Thus, less
of her savings is used to pay of the remaining of the loan. Other than that, by
purchasing MaxiHome Flexi Loan, Amni can minimize the initial down payment
required to get her mortgage by including zero moving costs such as MRTA premium,
legal fees, and valuation fees, into the total loan financing package. She also can
have free PA and medical insurance coverage on her overdraft account.
Last but not least, both a conventional and an Islamic version of the loan are
offered, and it might take the form of a term loan or financing, an overdraft, or a
combination of both. As a result, the consultation reached an agreement that Amni
should apply for MaxiHome Flexi Loan from Maybank. We realize that this choice will
ensure Amni is in a good financial position even after applying for a house loan.
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REFERENCES
https://www.ocbc.com.my/ocbcal_amin/pb_financing_manarat_home.shtml
https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/loans/home/
maxihome_flexi_loan.page?
https://www.maybank2u.com.my/iwov-resources/pdf/personal/loans/home/maxihome-
flexi_PDS.pdf
Julia Kagan (2022), What Is a Home Mortgage? Definition, Qualification, and Types
https://www.investopedia.com/terms/h/home-mortgage.asp
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