Base Financing Rate

Base Financing Rate (BFR) is Islamic Banking' illustrates of base financing rate which banks use as a basis for the financing rates. It is a benchmark profit rate where banks use to price their financing products.

House Financing package under the Islamic Banking Scheme, the price for floating rate financing products is usually quoted as an addition or subtraction to the BFR.

For example, if the home financing's profit is quoted at BFR-2.4% and the current BFR is at 6.60%, the home financing profit rate stands at 4.2% per annum (p.a.). BFR adjustments correlate with adjustments of the Overnight Policy Rate (OPR), which is determined by Bank Negara Malaysia (BNM).
 
The equivalent of the BFR in conventional / non-Islamic banking is the Base Lending Rate (BLR).

Some Islamic banks used Islamic Financing Rate (IFR) to illustrates of base financing rate, it is equivalent of the BFR.

Effective 2 January 2015, a new reference rate known as the Base Rate (BR) will be used to replace BFR for new floating rate financing facilities such as home financing.


Check the latest BFR on each bank HERE.

undo ...What is