Sam obtained a housing loan of RM720,000 on 8 October 2012 under the XYZ Bank MortgagePlus package, priced at BLR – 2.40% with a monthly instalment of RM4,589 over 19 years. This product links a designated non-interest-bearing current account to the loan, providing interest offset benefits.

The loan was fully disbursed on 11 January 2013, and instalments were initially debited from the designated current account. On 31 December 2013, Sam requested the closure of this account, after which instalments were deducted from another personal current account. Closing the designated account removed the interest offset feature.

In June 2024, Sam requested compensation, alleging the bank had not properly advised him of the consequences. XYZ Bank declined liability but refunded RM1,250 in maintenance fees.

FINDINGS

The loan was sold face-to-face, but it cannot be established whether branch staff adequately explained MortgagePlus requirements, including maintaining the designated linked account.

The LOO explicitly requires borrowers to open and maintain a designated current account for interest offset benefits.

Closing the account on 31 December 2013 removed the offset mechanism. The XYZ Bank’s staff processing this request should have verified the loan status and advised Sam of the consequences.

Sam did not review periodic loan statements. Statements from 2013 to 2024 consistently showed interest debited without reduction, indicating no offset benefit. A reasonable review would have alerted him earlier.

OUTCOME

Based on fairness and reasonableness, the case manager recommended that the interest difference of RM163,714.63 to be shared equally between both parties.

XYZ Bank refunded RM81,857.32 to Sam, reflecting a balanced assessment of responsibility that considers both the bank’s advisory lapse and Sam’s failure to review his loan statements. Both parties agreed with the recommendation.