AIA Fixed Rate Mortgage AIA confidential and proprietary - PowerPoint PPT Presentation

AIA Fixed Rate Mortgage AIA confidential and proprietary information. Not for distribution.

DISCLAIMER For internal staff and agent training only. This document is not a sales material and cannot be used for circulation to prospects. It serve only as a training guide to the agent in the selling concept of the products mentioned. In the actual selling process, the customer’s needs, affordability and preference must be considered to deliver fair value to the customer. The detailed product benefits and cost must be explained to help customers make informed decisions. Only AIA authorized sales materials are to be used when prospecting. Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

AIA Fixed Rate Mortgage 1. What is AIA Fixed Rate Mortgage 2. Unique Selling Proposition & Product Features 3. Underwriting Guidelines 4. AIA Shop Loan Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

01 What is AIA Fixed Rate Mortgage? AIA confidential and proprietary information. Not for distribution.

AIA Fixed Rate Mortgage Introducing AIA Fixed Rate Mortgages – a home loan with interest rate that does not change throughout the life of the loan. House owners can spread out payment for expensive purchases by making smaller, predictable amount over a long period of time. Because the interest rate does not change, homebuyers are protected from sudden increases in monthly mortgage payments should interest rates rise . Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Current Packages Package 1 4.99% p.a Fixed • Lowest Long Term Fixed Rate In The Market • Since 2010, the BLR has increased 5 times and gone up by a total of 1.3%p.a • Average lending rates (as compiled by BNM) 10 years = 5.71% 15 years = 6.61% 20 years = 7.36% 30 years = 8.42% Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Current Packages Package 2 5.39% p.a (With ZMC) • Zero Moving Cost (ZMC) • Switch without paying for legal fees, stamp duty, disbursement and valuation fees (loan documentations only). • Example: Loan RM500,000 Legal Fees : RM3950 Stamp Duty : RM2500 Disbursement : RM1200 (approx) Valuation : RM900 (approx) Total : RM 8550 (approx 2% of the loan amount) Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Current Packages Package 3 4.39% p.a (2 years) 5.15% p.a. (Thereafter) • Get the best of BOTH • Effective BLR – 2.46% for 2 years • Plus low fixed rates for rest of tenure No early termination fee if settlement the loan is via sale of property and own savings for all 3 packages Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Mortgage Step Up Campaign Fro rom 1 st st De December 20 2015 *Terms & *Te Co Condit itio ions Ap Apply Lim Limit ited Pe Perio iod On Only 4.99%p.a. with Zero Moving Cost* Minimum Loan Amount RM500,000 and above Fixed For The Entire Loan Duration Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution. 8

Specific Terms and Conditions 1. Zero Moving Cost Feature (Legal Fee, Stamp Duty, Disbursement and Valuation for loan agreement only). 2. Only for loan amount of RM500,000 and above. 3. Applicable to refinancing, new purchase and sub sales application. 4. Margin of finance shall be up to 90% for purchase and up to 80% for refinancing. 5. All other existing terms and conditions apply. 6. Strictly applicable for new applications received on 1 December 2015 onwards. No appeals will be entertained for loans that have been previously approved, accepted or pending disbursement. 7. In the event of any dispute, the decision by Mortgage Operations is FINAL. Important Note - All packages are still subject to review on a month to month basis based on funds availability and market conditions. Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution. 9

Islamic Loan Bank A (as at Dec 2015) Fixed Rate With Without Islamic Housing Insurance Insurance Loan Zero Moving 7.85% p.a. 7.95% p.a. cost (ZMC) Non Zero moving 7.65% p.a. 7.75% p.a. cost Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Base Rate Base Rate of Banking Institutions as at 2 Jan 2015 * Indicative Effective Bank BR (%) Effective date Lending Rate (%) Affin Bank 3.99 4.75 2-Jan-15 Alliance Bank 4.00 4.65 2-Jan-15 Ambank 3.99 4.45 2-Jan-15 CIMB Bank 4.00 4.65 2-Jan-15 HSBC Bank 3.90 4.85 2-Jan-15 Hong Leong Bank 3.99 4.65 2-Jan-15 Maybank 3.20 4.55 2-Jan-15 OCBC Bank 4.02 5.05 2-Jan-15 Public Bank 3.65 4.45 2-Jan-15 RHB Bank 4.00 4.65 2-Jan-15 Standard Chartered Bank 3.67 4.67 2-Jan-15 * The indicative Effective Lending Rate maybe subject to change from time to time at the discretion of the respective Financial Instituitions. Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Unique Selling Proposition 02 (USP) and Product Features Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Product Features Guaranteed Fixed For The Entire Loan Duration • The quoted BLR rate, and the minus %, is subject to change at the simple discretion of the bank Daily Rest Calculation • Daily Interest based on principal outstanding. • The more you pay, the greater the savings. Flexibility • Pay off the loan, or sell off the property anytime without no penalty (unless stated otherwise) Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

Product Features Real Capital Gains • Property value appreciate over time, but portion of interest payable remains fixed Free Up Future Incremental Income • Loan installment remains the same • When income increases over time, more funds for children education, renovations, etc. Loan Consolidation • Consolidate all loans into 1 simple and easy to manage account • Subject to current credit guidelines Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

The Benefits of Refinancing How it work: Golden Property Value in 2010 = Opportunity RM400,0000 for Refinancing Market with Property Value in 2016 = AIA RM800,000 - No restrictions on cash out tenure Amount Currently Owed = RM350,000 - Enjoy extra positive cash flow Refinance based on 80% CMV = - Invest & RM640,000 maximize in higher yield investments Cash Out for Other Purposes = RM290,000 (RMRM640k – RM350k) Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

ANALYSIS OF LENDING RATE (source: Bank Negara Website) 12.80 11.51 12.25 11.51 10.33 8.70 10.33 8.24 6.72 6.83 6.99 6.45 6.41 AIA FIXED AT 4.99% 4.92 Aver erage ge B BLR LR for or 33 33 y yea ears s : : 7.84 7.84% % Aver erage ge Len Lending ding Rate te for or 33 33 y yea ears s : : 8.71 8.71% AIA IA HO HOMEL ELOAN N AT T 4.99 4.99% % 16 Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

EFFECTS OF BLR INCREASE EFFECTS OF BLR INCREASE FROM 5.55% TO 6.60% (Increase by 1.05%) LOAN AMT MONTHLY INSTALMENT ADDITIONAL INCREASE IN TENURE WHEN (30yr loan at BLR – 2.40%) INTERESTS INSTALMENT REMAIN (30yrs) UNCHANGED 3.15% 4.2% RM500k 2,149 2,446 106,920 30 yrs to 40 yrs & 2 mths (additional RM262,178 in (+297) instalments) RM1m 4,298 4,891 213,480 30 yrs to 40 yrs & 3 mths (additional RM528,654 in (+593) instalments) An increase in 1.05 % will extend your loan tenure by 10 yrs and 2 months ! (when instalment is left unchanged) What if rates increase further? Disclaimer : Whilst every care has been taken in compiling this publication, AIA Bhd. and its officers are unable to accept any liability whatsoever 17 for the accuracy of its contents or for the consequences of any reliance which may be placed upon the information contains. Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.

IMPACT ON RISING INTEREST BLR RM500,000 loan BLR-2.40% p.a. 30 years loan BLR : 5.55% BLR : 6.60% Interest Rate: 3.15% p.a. Interest Rate: 4.20% p.a. Instalment : RM2,148 Instalment : RM2,148 Interest : RM1,312 Interest : RM1,750 (+ 438 ) Principal : RM836 Principal : RM398 (-438 ) BLR : 7.10% Another increase by 0.50% Another increase by 0.50% Interest Rate: 5.20% p.a . Interest Rate: 4.70% p.a. Instalment : RM2,148 Instalment : RM2,148 Interest : RM1,959 (+647 ) Interest : RM2167 Principal : RM 189 (- 647 ) Principal : Instalment not sufficient to cover monthly interest Outstanding will keep on rising Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution. 18

Using A Simple Financial 03 Calculator App Rev01 dated 01/09/2013 AIA confidential and proprietary information. Not for distribution.