We are often overwhelmed with long standing monthly payments for years and years and that can get overwhelming after sometime. So companies in Malaysia give you the advantage to make prepayments to settle your home loan as early as possible. This however, comes with a prepayment penalty, which is more like a privilege charge. Most companies who offer this advantage charge the borrower 2% of the loaned amount. However, Bank Islam is one of the few banks who charges only 1% for the same. This makes a lot of difference to people because they don’t have to drag the burden for several unrequired years. However, for those who wish to have a long tenure, this product will not disappoint you at all, because it allows a maximum tenure of over 35 years. Also there are other advantages that makes the series of products quite lucrative for new home buyers as well as well as people who are looking for an opportunity to invest in real estate, without burning a hole in their pockets. The bank is also generous enough to offer deferred payments for two months, especially the year end, each year. Also there is a discount of 20% on stamp duty when one opts for some of these housing loans. There are four banking options to choose from and the minimum annual income of the applicant to get this loan approved is RM 24,000, which is the industry standards for most home loans. To get a better idea of these housing finance product from Bank islam, kindly read on.
You’re probably eligible for an Bank Islam Home Loan if you are
At least 18 years old
Less than 70 years old
Salaried / Self-employed
with regular income
Earn more than the minimum
Your Bank Islam Home Loan amount eligibility is based on these factors
Instalment limited to about 50%
of monthly income
Loan capped @ 90% of property value + 5% MRTA
Instalments of other loans lower
Increase your eligible Bank Islam Home Loan amount by these steps
Make your spouse a co-applicant,
and her income will add
to your eligibility
Choose longer tenure loan up to 35 years
Alternatively add your parents
Documentation needed to apply for an Bank Islam Home Loan
- 1. Photocopy of NRIC
- 2. Booking Receipt from Developer (for under construction properties)
- 3. A copy of valuation report obtained from Bank’s approved panel of valuers (if required).
- 4. To substantiate additional income documents (if applicable)
- 5. Documentation for salaried applicants:
- Latest 3 months pay slips/ salary vouchers
- Latest EPF Statement
- Latest 6 months commission statements where commission is credited
- Letter from employer to confirm on applicant’s income
- 6. Documentation for self-employed applicants:
- Latest Borang B supported by tax payment receipt or E-Filing supported by acknowledgement.
- Latest 6 months business account statements (Sole Proprietorship/ Partnership)
- Latest 6 months personal account statements (Limited Company/ Sdn Bhd)
- Latest Profit & Loss account or Management account.
Bank Islam Home Loan Interest RatesUpdated on 22 Jan 2017
|Margin of Finance||Up to 90%|
|Guarantor Requirement||No Guarantee Required|
Bank Islam Home Loan Malaysia
The home loans offered by Bank Islam caters to the Shariah concept of banking and offers customers comprehensive home financing solutions. The home loans offer attractive terms such as high margin of finance and cost saving by cutting down on additional costs such as processing fees. The loans follow the Shariah principle of Tawarruq and provides for capped interest rates and a financing structure that is tiered which helps customers to better manage their finances.
Features of the Bank Islam Home Loan
- The loan tenures for Bank Islam home loan is up to 35 years
- The margin of the home loan provides for up to 90% of finance
- The loans have a lock in period of 5 years
- The approval time for home loans from bank Islam is 30 days
- The late penalty fee for repayment of the loan is 1% of the outstanding amount
- The home loans from Bank Islam require an MRTT and Fire Insurance policy
- The loans from Bank Islam offers borrowers the option of deferring two months of payment mainly November and December every year
- The loans offer a 20% discount on stamp duty
Bank Islam Housing Loan Interest Rates
The interest rates charged by Bank Islam on their home loans is a floating interest rate and primarily depends on the financing amount borrowed. For amounts exceeding RM 100,000 the interest rate on the loan is 4.45% p.a. However the effective interest rate will be determined by the bank at the time of approval of the loan.
Types of Home Loans available from Bank Islam
Bank Islam offers 4 types of home loans to their customers and their features are given below
Baiti Home financing:
The Baiti home financing offers a finance margin of up to 90% with a tenure of up to 35 years or when the borrow attains the age of 70 years, whichever is earlier. The loan offers financing for MRTT and LTHT and offers competitive rates.
SJKP Housing Scheme:
This scheme is catered for low cost or medium cost housing and offers borrowers a finance margin of up to 100%. Under this scheme, property or residence worth Rm 150,000 can be purchased with a maximum financing of Rm 120,000 being provided by the scheme and the cut off age for this scheme is 65 years of age
My First Home Scheme:
This plan is designed for first time home buyers who will be residents at the place of purchase. It is intended for owner occupation and the tenure of this loan is when the borrower attains 65 years as at last birthday or 35 years whichever is earlier. Under this scheme, borrowers can avail loans for properties whose value ranges between RM 100000 to RM 500000.
Wahdah Home refinancing:
This plan is similar to the Baiti home financing and offers a tenure of up to 35 years or till the borrower attains the age of 70, whichever is earlier. It offers competitive rates and a finance margin for up to 90% of the cost and accounts for stamp duty and legal fees along with MRTT insurance policy. The loan is designed to assist the borrower in refinancing a completed residential property.
How to apply for Bank Islam Home Loans
Applying for a Bank Islam home loan is a very simple process. It can be done hassle free online at their website or one can also choose to fill out the application forms at their nearest Bank Islam branch. Applicants will need to meet the eligibility criteria along with having the required documentation for the processing of the loan.
- The minimum Annual income of the applicant needs to be at least RM 24000.
- The minimum age of the applicant should be at least 18 years as at last birthday and the maximum permissible age for an applicant is 70 years of age as at last birthday.
- For the SJKP Housing scheme, the eligible age is 18 years to 65 years whereas for the My First Home scheme, the applicant should not exceed 40 years of age
- The applicant needs to be a Malaysian citizen to apply for the Bank Islam Home Loans
- The applicant needs to have a photocopy of their identity card
- They need to have the copy of the sale and purchase agreement
- For salaried applicants the documents needed also include the latest 3 months of Pay slips, a confirmation letter from the employer and a statement of their annual income along with other supporting income documents such as the latest bank statements where the salary is credited
- For self-employed applicants, the documents needed also include the copy of the business registration certificate, latest 6 months bank statements and the latest from B.
F.A.Qs for Bank Islam Housing Loan
Q) Are any insurance policies compulsory with the Bank Islam Home Loans
A) Yes. A fire insurance policy is compulsory for the Bank Islam home loans whereas an MRTT insurance policy is highly recommended as it covers the loan in any unfortunate case of death or total permanent disability of the borrower which will result in failure of repayment
Q) What are the monthly commitments if one takes to a home loan from Bank Islam?
A) The home loans from Bank Islam follow a conventional Islamic principle wherein the monthly instalment is calculated based off the profit rate at which Bank Islam is entitled to earn. This profit rate is capped to the vicinity of 10.5%. The loan is also based on the financing package chosen and multi-tiered financing packages from Bank Islam offer borrowers interest rates of as low as 2.5% for the first year and an increase in the subsequent years capped to 7.5% p.a.
Q) What are the benefits of taking out a home loan from Bank Islam?
A) The home loans offer a high margin of finance at competitive rates and offer the added benefits of waived processing fees along with a 20% discount on stamp duty. It also offers flexible financing packages that allow borrowers to cope with additional costs such as refurbishing expenses.
Other Products offered by Bank Islam:
Apart from offering Home Loan,Bank Islam offers other products and services which include:
News About Bank Islam Home Loan
Bank Islam TAP-i Introduces Income Tax Payment Feature
Bank Islam Malaysia Bhd is estimating its TAP (Transact-at-Palm) Mobile Banking-i (TAP-i) service to help contribute 6% to its fee-based income for the year with the launch of the country’s first on-the-go payment of income tax via mobile phones.
Datuk Seri Zukri Samat, MD mentioned that from the TAP-i service grew 35.6% to slightly over RM7 million last year from 2014.
Zukri also said, “This (RM7 million) represents about 5% of our fee-based income. We are targeting slightly more now,” to the reporters at the signing of a strategic business collaboration agreement with the Inland Revenue Board of Malaysia (LHDN) yesterday.
Yesterday, the bank announced the expansion of its mobile banking services to include income tax payment. Under the agreement with LHDN, TAP-i subscribers will be able to pay their income tax via their mobile phones.
Zukri also added, “TAP-i is unique as it enables users to perform electronic transactions without the need of internet.”
21st April 2016