FACULTY OF COMPUTER SCIENCE AND MATHEMATICS

CS112
DIPLOMA IN ACTUARIAL SCIENCE

CASE STUDY REPORT

GROUP 2 – MAYBANK VS OCBC AL-AMIN

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:

AHMAD NUR AZAM BIN AHMAD RIDZUAN

Group Assignment – Case Study

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

1.0 Introduction ........................................................................................................... 1

2.0 History of Companies ........................................................................................... 2

2.1 History of OCBC Al-Amin................................................................................. 2

2.2 History of Maybank .......................................................................................... 3

3.0 Housing Loans for both Companies .................................................................... 4

4.0 Monthly Payment for both Companies ................................................................. 5

5.0 Amortisation Schedules ........................................................................................ 6

5.1 Maybank Amortisation Schedules .................................................................. 6

5.2 OCBC Al-Amin Amortisation Schedules ......................................................... 7

6.0 45th Interest Payment for both Companies ........................................................... 9

7.0 Outstanding Balance for both Companies ........................................................... 9

8.0 Selection of the Best Loan .................................................................................... 9

9.0 Conclusion ............................................................................................................. 11

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.

Thus, according to the case study provided above, Amni is in a dilemma in choosing
the best housing loan to finance her wish to purchase a two-storey house that has a total value
of RM 900,000 and she asked for consultation as she has minimal knowledge regarding
financial mathematics. Amni is currently working at Petronas Carigali Berhad as a Human
Resource Executive with a monthly salary of RM7,000. Hence, with the information provided,
this report is made to identify on which loan is best suited for Amni and her financial status,
whether it is the product provided by Maybank or OCBC Al-amin.

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2.0 History of the Companies

2.1 History of OCBC Al Amin

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.

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 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.

2.2 History of Maybank

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.

In addition to its commercial banking network, Maybank operates several specialized

subsidiaries in the insurance, investment banking and assets management, and finance
sectors. The group's subsidiaries include Mayban General Assurance, Mayban Life
Assurance, and Maybank Takaful, the latter focusing on developing insurance products
compatible with Moslem law; the Aseam group, including Aseam Credit, Aseamlease, Aseam
Unit Trust, and Aseambankers Malaysia Bhd; Mayban International Trust, Mayban Discount,
and Mayban Investment Management; and Maybe Securities.

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 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.

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3.0 Housing loans for both companies

Housing Loans MaxiHome Flexi (Maybank) Manarat Home- i (OCBC Al-

Amin)
Profit Rate Standardized Base Rate = Standardized Base Rate =
2.25% 2.75%
Profit Rate (SBR + 1.45%) Profit Rate (SBR + 1.70%)
=3.70% =4.45%

Tenure Up to 35 Years (420 months) 30 Years (360 months)

Margin of finance Up to 90% margin of finance Up to 90% margin of finance

Lock in period 3 Years (36 months) - With lock-in period

If any of the Facilities are
fully redeemed/ settled
within the holding period, you
will pay the Bank an early
termination fee. The early
termination fee is calculated
at 2% of the financing limit
which is the estimated costs
already incurred.

- No lock-in period
No penalty charged on early
settlement.

Insurance policy - Customer must purchase - The customer may choose

Mortgage Reducing Term to purchase Mortgage
Assurance (MRTA) because Reducing Term Takaful
that’s compulsory. (MRTT) for mortgage
protection. This MRTT is
- The one-off premium is optional.
calculated based on age,
amount borrowed, loan -Houseowner takaful is
period, and interest rate. required on the property to
be charged as security.

- The one-off premium is

computed based on your
age, loan amount and loan
tenure and may be added to
the Manarat-i package.

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 Other Benefits - Can minimise the initial -The Bank offers to purchase
down payment required in the property from the owner
getting your mortgage by under the Bai’ (sale and
including zero moving cost purchase of completed
such as MRTA premium, asset) or Bai’ Istisna’ (sale
legal fees, and valuation and purchase of under
fees, into the total loan construction asset) contract.
financing package.

- Free PA and medical

insurance coverage on your
overdraft account.

4.0 Monthly Payment

The information based on the question:

a) Price of property = RM 900,000

b) Deposit (0.1) = RM 90,000

c) Amount of loan = RM 810,000

d) (12 months x30 years) = 360 months

MaxiHome Flexi (Maybank) Manarat Home- i (OCBC Al-Amin)

i = 3.70% / 0.037 i = 4.45% / 0.0445

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5.0 Amortisation Schedules

5.1 Maybank Amortisation Schedules

Total Loan 810000

Effective rate 0.003032249
Monthly
Payment 3700.263537

Months Payment Interest Principal Balance

0 0 0 0 810000
1 3700.263537 2456.1215 1244.142037 808755.858
2 3700.263537 2452.348951 1247.914586 807507.9434
3 3700.263537 2448.564964 1251.698573 806256.2448
4 3700.263537 2444.769503 1255.494034 805000.7508
5 3700.263537 2440.962532 1259.301005 803741.4498
6 3700.263537 2437.144018 1263.119519 802478.3302
7 3700.263537 2433.313926 1266.949611 801211.3806
8 3700.263537 2429.472219 1270.791318 799940.5893
9 3700.263537 2425.618864 1274.644673 798665.9446
10 3700.263537 2421.753824 1278.509713 797387.4349
11 3700.263537 2417.877065 1282.386472 796105.0485
12 3700.263537 2413.98855 1286.274987 794818.7735
13 3700.263537 2410.088244 1290.175293 793528.5982
14 3700.263537 2406.176112 1294.087425 792234.5108
15 3700.263537 2402.252117 1298.01142 790936.4993
16 3700.263537 2398.316223 1301.947314 789634.552
17 3700.263537 2394.368395 1305.895142 788328.6569
18 3700.263537 2390.408596 1309.854941 787018.8019
19 3700.263537 2386.43679 1313.826747 785704.9752
20 3700.263537 2382.452941 1317.810596 784387.1646
21 3700.263537 2378.457011 1321.806526 783065.3581
22 3700.263537 2374.448965 1325.814572 781739.5435
23 3700.263537 2370.428765 1329.834772 780409.7087
24 3700.263537 2366.396375 1333.867162 779075.8416
25 3700.263537 2362.351758 1337.911779 777737.9298
26 3700.263537 2358.294877 1341.96866 776395.9611
27 3700.263537 2354.225694 1346.037843 775049.9233
28 3700.263537 2350.144173 1350.119364 773699.8039
29 3700.263537 2346.050275 1354.213262 772345.5907
30 3700.263537 2341.943963 1358.319574 770987.2711
31 3700.263537 2337.825201 1362.438337 769624.8327
32 3700.263537 2333.693949 1366.569588 768258.2632
33 3700.263537 2329.55017 1370.713367 766887.5498
34 3700.263537 2325.393826 1374.869711 765512.6801
35 3700.263537 2321.224879 1379.038658 764133.6414
36 3700.263537 2317.04329 1383.220247 762750.4212

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 37 3700.263537 2312.849023 1387.414514 761363.0067
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

5.2 OCBC Al-Amin Amortisation Schedules

Total Loan 810000

Effective rate 0.003634782
Monthly
Payment 4037.877078

Months Payment Interest Principal Balance

0 0 0 0 810000
1 4037.877078 2944.173169 1093.703909 808906.2961
2 4037.877078 2940.197794 1097.679284 807808.6168
3 4037.877078 2936.207969 1101.669109 806706.9477
4 4037.877078 2932.203643 1105.673435 805601.2743
5 4037.877078 2928.184761 1109.692317 804491.5819
6 4037.877078 2924.151272 1113.725806 803377.8561
7 4037.877078 2920.103122 1117.773956 802260.0822
8 4037.877078 2916.040257 1121.836821 801138.2454
9 4037.877078 2911.962625 1125.914453 800012.3309
10 4037.877078 2907.870172 1130.006906 798882.324
11 4037.877078 2903.762844 1134.114234 797748.2098
12 4037.877078 2899.640586 1138.236492 796609.9733

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13 4037.877078 2895.503345 1142.373733 795467.5995
14 4037.877078 2891.351066 1146.526012 794321.0735
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

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 59 4037.877078 2688.011327 1349.865751 738174.9685
60 4037.877078 2683.104859 1354.772219 736820.1963

6.0 45th Interest Payment for both Companies

MaxiHome Flexi (Maybank) Manarat Home- i (OCBC Al-Amin)

7.0 Outstanding Balance

MaxiHome Flexi (Maybank) Manarat Home- i (OCBC Al-Amin)

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.

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 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).

On top of that, Maybank have a longer repayment period which is up to 35 years or

until the age of 70 whichever event occurs first. Thus, Amni will face no problem in proceeding
with her initial plan of making 30 years as the tenure period. Furthermore, with the same
tenure, MaxiHome Flexi (Maybank) issued less interest compared to Manarat Home- i (OCBC
Al-Amin) which ensure that the monthly payment needed to be paid by Amni will be lower. This
will hugely impact how Amni lives her life as she has RM7,000 as her monthly income and
with other liabilities, a lesser monthly installment would be preferable for her. Other than that,
free PA and medical insurance coverage on your overdraft account is provided by this product.
If ever such difficulties are faced by Amni that relates to her health, the medical insurance
coverage can ensure that she will worry less as any bills for her medical treatment can be
covered.

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
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 needs some extra cash for
an urgent matter. This will surely benefit 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 proceeds
with MaxiHome Flexi (Maybank). Through all of the reasons given above, we conclude that

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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.

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

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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

MIFC (2023). OCBC Al-Amin Bank https://www.mifc.com/-/ocbc-al-amin-bank

OCBC AL- AMIN (2023). Manarat Home-i

https://www.ocbc.com.my/ocbcal_amin/pb_financing_manarat_home.shtml

Maybank2u, MaxiHome Flexi Loan

https://www.maybank2u.com.my/maybank2u/malaysia/en/personal/loans/home/maxihome_fl
exi_loan.page?

Maybank (2022), Mortgage Product Disclosure Sheet

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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