How is home loan interest calculated in Malaysia?

Q: What are OPR and SBR, and how do they set your rate?

OPR: set by Bank Negara Malaysia's Monetary Policy Committee. The meeting on 3 September 2026 held it at 2.75%. The next meeting is on 5 November 2026. SBR: announced by Bank Negara on 11 August 2021 and used for new retail floating-rate loans from 1 August 2022. Bank Negara states that the SBR is linked solely to the OPR, so it changes only after the OPR changes. Your rate: the SBR plus the bank's spread. Maybank, for example, publishes an SBR of 2.75% (effective 11 July 2025) and an indicative effective rate of 3.90% a year for a RM350,000 home loan over 30 years.

Simon Wang San Teik · Licensed real estate negotiator, REN 56506 · Johor Bahru · Last verified 2026-09-25

Interest is charged on the part of the loan you haven't repaid yet. On a Malaysian floating-rate home loan, the rate has two parts: the Standardised Base Rate (SBR), plus the spread your bank adds for your loan. The SBR moves only when Bank Negara Malaysia changes the Overnight Policy Rate (OPR).

What are OPR and SBR, and how do they set your rate?

OPR: set by Bank Negara Malaysia's Monetary Policy Committee. The meeting on 3 September 2026 held it at 2.75%. The next meeting is on 5 November 2026.
SBR: announced by Bank Negara on 11 August 2021 and used for new retail floating-rate loans from 1 August 2022. Bank Negara states that the SBR is linked solely to the OPR, so it changes only after the OPR changes.
Your rate: the SBR plus the bank's spread. Maybank, for example, publishes an SBR of 2.75% (effective 11 July 2025) and an indicative effective rate of 3.90% a year for a RM350,000 home loan over 30 years.

How is the monthly instalment calculated? A worked example

Using Maybank's published example: a RM350,000 loan over 30 years (360 months) at 3.90% a year, repaid in equal monthly instalments.

Item	Amount
Monthly instalment	about RM1,650.84
Interest in month one (RM350,000 × 3.90% ÷ 12)	RM1,137.50
Principal repaid in month one	RM513.34
Interest paid over the first 10 years	about RM122,909
Principal repaid over the first 10 years	about RM75,192
Total interest over 30 years	about RM244,302
Total repaid over 30 years	about RM594,302

Early instalments are mostly interest, because interest is charged on the balance still owed. As the balance falls, the interest share of each instalment shrinks and the principal share grows.

Calculated by this site with the standard formula, assuming the rate stays the same for 30 years. Your bank's own method is set out in its Product Disclosure Sheet (PDS), and its figures may differ slightly.

What happens to my instalment when the SBR changes?

Bank disclosure sheets state that your instalment changes when the SBR changes, and show what it becomes if the SBR rises by 1% or 2%. For the same loan:

Rate a year	Monthly instalment	Total interest over 30 years
3.90%	RM1,650.84	about RM244,302
4.90% (SBR +1%)	RM1,857.54	about RM318,716
5.90% (SBR +2%)	RM2,075.98	about RM397,352

When the SBR falls, the instalment falls with it.

Assumes the rate in the table applies from the first month.

Which document should you read before you sign?

The Product Disclosure Sheet. Bank Negara's Policy Document on Product Transparency and Disclosure (2 December 2024) sets the rules for it. Check three things first: the effective rate, the monthly instalment, and the table showing what happens if the SBR moves.

Tell me how much you plan to borrow and for how long. I'll put the disclosure sheets from each bank side by side and go through them with you line by line.

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SOURCES

OPR and 2026 meeting dates: Bank Negara Malaysia MPC meetings page, read 2026-09-25. Page
SBR: Bank Negara Malaysia, Revised Reference Rate Framework, 11 August 2021. Page
Maybank SBR of 2.75% and indicative effective rate of 3.90% (RM350,000, 30 years): Maybank rates page, read 2026-09-25. Page
Interest charged on the outstanding balance; instalments change with the SBR; +1% and +2% SBR table: Hong Leong Bank mortgage Product Disclosure Sheet (MG PDS ver Dec 2025). Document
Bank Negara Malaysia, Policy Document on Product Transparency and Disclosure, 2 December 2024. Page
Instalment, interest and principal figures: calculated by this site with the standard equal-instalment formula.

General information only, not financial advice. No bank or product is recommended. Your bank's disclosure sheet and letter of offer prevail.