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Saving for Retirement Malaysia: How Refinancing Your Mortgage Can Help

After years of long, hard work to build a life for yourself and your loved ones, surely you would want to sit back, relax, and enjoy your comfortable retirement life. An important piece of advice about saving for retirement would be: well-thought retirement planning and saving for retirement now is crucial.

Obviously, as you near retirement, it may do you well to consider and assess your retirement plans. Having said that, retirement planning is actually a lifelong process, and young professionals would highly benefit from getting their ducks in a row as soon as possible.

As such, we’ll discuss how refinancing can be an effective strategy to save for retirement and the pros and cons of refinancing.

The Importance of Saving for Retirement

When you save for retirement, you’re essentially saving for your future. From retiring comfortably to leaving behind a legacy for your loved ones, you will need a steady stream of money to sustain these future expenses as well as any emergencies.

Saving for retirement starts with setting your retirement goals, coming up with a proper retirement plan and sticking to said plan. After all, you’re retiring from work and not life. Below are some of the major significance of having a retirement fund:

To retain your standard of living

Of course, you would want to maintain your current lifestyle post-retirement. Currently, your everyday expenses are covered by your income, an unavailable source after retirement.

Your future is not guaranteed, and it’s vital to acknowledge that you are susceptible to experiencing financial hardships. Having retirement savings means that you’re preparing yourself for the worst while hoping for the best.

To be well-prepared and emergency-ready

Healthcare costs, medical emergencies especially, are a pivotal aspect to note as ideally, you would not want to depend on others. With retirement savings, you’re basically creating an emergency fund in case of unexpected illness or other unplanned events.

Furthermore, your retirement fund also serves as a financial safety net. Thus, planning and saving for your retirement in advance can help you protect yourself and the ones you cherish from unprecedented financial obstacles.

To accomplish your bucket list

Retirement is merely the beginning of a new adventure in your life. If you retire with a healthy pool of funds, you can buy gifts for your loved ones, travel the world, and buy a vacation house— do whatever your heart desires!

Not only that, but you can also continue your present commitments, such as funding for your children’s education and other expenses.

To ensure your family’s well-being

You must remember that your retirement doesn’t only affect yourself but also your family. Your retirement savings ensures that you don’t become a financial burden for your family in the future.

What’s more, this also means that you can leave your family with a legacy. Having a retirement fund enables you to leave your wealth behind for them so that they can live a life of comfort, even in your absence.

How Cash-out Refinance Help You Save for Retirement

If you’re like the rest of us, you’re probably still trying to pay off your mortgage. People believed that they should finish paying off their mortgage before retirement. However, mortgage interest rates are relatively low, and more people are starting to rethink their stance on mortgage debt.

Refinancing your home is a great financial move if you want to save for a retirement fund. Be that as it may, one should consider both pros and cons before making a decision that could heavily impact their overall retirement life. Below are some key advantages as well as disadvantages of refinancing your mortgage.


Immediate financial relief

  • Refinancing offers fast financial relief as it entails lower payments. This is great, especially if you believe you might need some help with your monthly repayments. Refinancing gives you extra breathing space, allows you to get back on your feet, and can contribute to a big difference in your monthly cash flow.

Streamline mortgage payment

  • If you proceed with a home equity loan on top of your original house loan, refinancing enables you to combine both loans into a single payment. This is a far more reasonable option than paying your loans separately. As such, this provides you with the stability of paying both payments in a single transaction.

Reduce overall debt

  • Refinancing allows you to unlock or tap into your home equity and cash out. You can then use the money to consolidate debt and free yourself financially. This will benefit you in the long run as getting rid of high-interest debt enables you to significantly reduce your spending post-retirement.

Free up cash while maintaining asset

  • When you refinance your housing loan, you will still have ownership of your property, allowing you to capitalise on your property. Not to mention, you can still gain from your property’s value appreciation.
  • How? Think of it this way: if you were to rent out your property, you would be gaining monthly income, and you can use that to pay off the monthly repayments.
  • If you have life insurance, the payout would also help cover the mortgage and protect the home you would be leaving behind for your loved ones.

Invest for retirement

  • Cash-out refinancing will also let you use the cash-out to save in additional retirement funds or investment funds. By harnessing the power of compound growth, you would get greater returns if you start saving early and contribute regularly. All that’s left to do next is watch your money grow!


Refinancing isn’t cheap

  • Refinancing means that you’re taking a new loan, putting you on the hook for repaying the closing costs once again. Closing costs generally range from 2-5% of the loan value, so if you still owe a lot on your original mortgage, you could end up paying a large amount just to complete the transaction.

Extended loan repayment period

  • An important thing to keep in mind is determining what type of mortgage term is suitable for you. To put it simply, the larger the payment, the shorter the term, but you’ll finish paying off your mortgage much faster. In contrast, if you choose cheaper payments, there’s a possibility that you’ll be paying off your mortgage far into retirement.

Equity is not everything

  • If you don’t have your spending under control, refinancing and getting equity out of your house to pay off debts won’t really help. If you don’t plan ahead of time, keep track of your purchases, and set realistic goals, you can find yourself accumulating debt all over again. Even after retirement, you may find yourself stuck in the same situation as before you refinanced.

How Bluebricks Can Help You

As a trusted loan consultant company, Bluebricks aims to assist fellow Malaysians in getting through their retirement days with zero financial dependence. Our proven services have zero upfront fees and have no hidden charges.

Backed with years of experience, our professional consultants offer expert financial advice so you can make definitive decisions such as refinancing your mortgage with peace of mind. Contact us and let us help you streamline your financial issues with our FREE consultation.

Loan Rejected Services

Your loan application just got rejected? Fret not! At Bluebricks, we strive to raise awareness and provide a greater understanding of the reasons affecting your loan application. This includes information on alternative solutions and advice to improve your eligibility for future financing.

With our refinance housing loan rejected services, we can help you with your loan applications to save your precious time and money.

Saving for Retirement – FAQ

It’s everyone’s goal to enter their golden years with little to no debt. However, cash-out refinancing may not be the solution for everyone as it can result in less favourable terms depending on your situation. For this reason, you should always get professional advice in order to make an informed decision.

Below are some common questions regarding refinancing that might be helpful for you to save for retirement.

What are some things to consider before you opt for refinancing before retirement?

Refinancing can make or break your retirement life. As such, you must remember to do the math before coming to a conclusion. Before applying to refinance your mortgage, you should take into consideration the matters below:
Your home’s equity
Your credit score
Your debt-to-income (DTI) ratio
Your taxes
The overall cost of refinancing

What are the advantages of cash-out refinancing before retirement?

Improve and increase cash flow
Serves as a retirement fund
Possibly shorten monthly payments
Debt consolidation

Check out our article to learn more about the advantages of cash-out refinancing.

I’m a retiree. Can I still refinance my house?

Refinancing your house after retirement may be a challenge, but it is possible if you have the right resources. However, opting for refinancing after retirement might not be ideal as you no longer have a steady, reliable income.

That said, retirees can still qualify for loans in retirement since there’s no age limit when it comes to refinancing a home. Creditworthy homeowners are able to prove themselves eligible via income from retirement accounts as well as various investments.

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Picture of Wilson Wai Kit

Wilson Wai Kit

Senior Consultant

With extensive banking experience, notably as a mortgage sales officer at UOB Bank, Wilson leverages his understanding of loan applications and approvals to offer financial insights and support to empower individuals to make informed decisions regarding their financial futures.

Feel free to contact him for assistance with your financial needs!

I want to know about bank loans
Picture of Wilson Wai Kit

Wilson Wai Kit

Senior Consultant

With extensive banking experience, notably as a mortgage sales officer at UOB Bank, Wilson leverages his understanding of loan applications and approvals to offer financial insights and support to empower individuals to make informed decisions regarding their financial futures.

Feel free to contact him for assistance with your financial needs!

I want to know about bank loans



About Bluebricks

BlueBricks Holding is one of the top ten leading loan agency companies in Malaysia in terms of loan approval rates. As a leading loan agency company, we have extensive knowledge and experience in mortgage, personal loans, and business loans, and this enables us to help our customers to get the deal that is best suitable to them.

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