Bought Your Home in 2018 at 4.10%? Refinancing Could Free Up Hundreds a Month

Is your 2018 home loan rate still competitive in 2026?

Probably not. If you took out your home loan in 2018 at around 4.10%, it was priced under an entirely different rate environment, one where Bank Negara Malaysia’s Overnight Policy Rate (OPR) sat higher and banks’ base rates hadn’t yet gone through the standardisation that followed.

Since then, BNM cut the OPR from 3.00% to 2.75% in July 2025, and every review since, including its May 2026 meeting, has kept it there, with economists expecting the rate to hold for the rest of 2026.. That cut fed directly into the Standardised Base Rate (SBR), which all banks must match, and from there into the spreads banks offer new and refinancing customers. The result: effective home loan rates for well-qualified borrowers now run roughly 4.22% to 4.35% per annum, and iMoney’s panel banks have offered qualified refinancers rates as low as 3.50% this year.

If your 2018 loan has been sitting on its original spread ever since, you may not be feeling the benefit of any of these cuts, and that gap between what you’re paying and what’s actually available is where the savings live.

How much could refinancing actually save you?

The maths depends on your outstanding balance, remaining tenure, and the new rate you qualify for, but the shape of the savings is consistent. For example, a borrower with RM350,000 outstanding at 4.60% refinancing to 4.22% over 25 years saves roughly RM80 to RM100 a month, or RM24,000 to RM30,000 across the remaining tenure. A 2018 loan at 4.10% refinancing into the 3.50%-3.80% range that some borrowers now qualify for could see an even larger gap.

The key phrase here is “matching tenure.” Refinancing doesn’t have to mean starting a fresh 30- or 35-year clock. You can refinance into a new loan set to your remaining tenure, say, 18 years left on an original 25-year loan, so you capture the lower rate without paying more interest over a longer stretch. Stretching the tenure back out can lower your monthly instalment further, but it usually costs more in total interest, so it’s worth deciding upfront which outcome you actually want.

What should you check before refinancing?

A few things determine whether refinancing actually makes sense for you:

• Lock-in period. Most Malaysian home loans carry a lock-in period of three to five years, after which refinancing shouldn’t trigger an early settlement penalty. A 2018 loan is almost certainly well past this window.
• Refinancing costs. Expect to pay for valuation, legal fees, stamp duty, disbursement, and possibly new insurance, typically around 2-3% of the loan amount. Some banks offer packages that absorb these costs; weigh that against a slightly higher rate.
• Your DSR and current financial profile. Your Debt Service Ratio, credit history, and income all factor into what rate and tenure you’ll actually be approved for, not just what’s advertised.
• Disclosure of terms. Banks are required under BNM’s Product Transparency and Disclosure rules to lay out fees and terms in plain language before you sign, asking for this in writing before comparing offers.

Your Move

Follow these steps to find out what refinancing could actually save you:

1. Pull your current loan statement and note your outstanding balance, remaining tenure, and current effective rate.
2. Confirm your lock-in period has passed by checking your original loan agreement.
3. Run the numbers using iMoney’s Home Loan Refinance Calculator to see your estimated monthly savings across different banks.
4. Check your eligibility with iMoney’s pre-screening tool before applying, so you know where you stand before a bank runs a credit check.
5. Compare at least two offers, including any package that waives legal or valuation fees, before committing.

A rate from 2018 was fair for its time, but “its time” isn’t now. Get your refinancing savings figure.