• Home Loan BYTES FROM OUR KITCHEN

    Home Loans In Malaysia

    Planning to purchase a property? Why not widen up your financing options by applying for a home loan? Here are some of the best home loans available in Malaysia. Just compare the interest rates and apply as per your convenience.

    Quick Reads

    Compare Housing Loans From Different Banks In Malaysia

    Bank Name
    Loan/Financing Amount
    Interest Rate/Profit Rate
    processing fee
    Know more
    Affin Bank Malaysia Affin Bank
    Conventional: Up to RM5 million.
    Up to (BR + 3.11)% p.a
    -
    Affin Bank Malaysia Affin Bank islamic
    Islamic: Up to RM500,000.
    Up to (BR + 4.61)% p.a.
    No charge
    Alliance Bank Malaysia Alliance Bank
    Conventional: Up to 90% of property valuation.
    Pegged to base rate.
    Up to RM212
    Alliance Bank Malaysia Alliance Bank Islamic
    Conventional: Up to 90% of property valuation.
    Pegged to base rate.
    No charge
    Ambank Malaysia AmBank
    Conventional: Up to 95% of property valuation.
    Pegged to base rate.
    Up to RM212
    Ambank Malaysia AmBank Islamic
    Islamic: Up to 95% of property valuation.
    Up to 9.99% p.a.
    Up to RM212
    Bank Islam Malaysia Bank Islam
    Up to RM500,000
    As per bank’s discretion.
    No charge
    Bank Muamalat Malaysia Bank Muamalat
    Up to 90% of valuation of the property.
    Up to 10.50% p.a.
    No charge
    Bank Rakyat Malaysia Bank Rakyat
    90-110% of valuation of property.
    Up to 5.35% p.a.
    -
    BSN Malaysia BSN
    Conventional:Up to 100% of property valuation.
    Up to 6.95% p.a.
    No charge
    BSN Malaysia BSN Islamic
    Islamic:Up to 100% of property valuation.
    Up to 6.95% p.a.
    No charge
    CIMB Malaysia CIMB
    Conventional:Up to 100% of property valuation.
    Up to 5.35% p.a.
    Up to RM212.
    CIMB Malaysia CIMB Islamic
    Islamic:Up to 100% of property valuation.
    Pegged at a base financing rate.
    Up to RM212.
    Hong Leong Malaysia Hong Leong
    Conventional:Up to 100% financing.
    As per bank’s discretion
    RM0.50 per cheque.
    Hong Leong Malaysia Hong Leong Islamic
    Islamic:Up to 100% financing.
    Pegged at a base rate of 3.69% p.a.
    -
    Kuwait Finance House Kuwait Finance House
    Up to 90% of margin of financing.
    Up to 4.99% p.a.
    Up to RM500.
    Maybank Malaysia Maybank
    Conventional:Up to 95% of property valuation.
    Pegged to bank’s base rate.
    Up to RM200 + GST.
    Maybank Malaysia Maybank Islamic
    Islamic:Up to 90% of property valuation
    Based on the bank’s base rate.
    Up to RM200.
    OCBC Malaysia OCBC
    Conventional:Up to 90% of property valuation.
    Pegged to base rate at 3.83% p.a.
    No Charge
    OCBC Malaysia OCBC Islamic
    Islamic:Up to 90% of property valuation.
    Pegged to base financing rate at 6.76% p.a.
    No Charge
    Public Bank Malaysia Public Bank
    Conventional:RM100,000 and above.
    Up to 4.35% p.a.
    Up to RM212.
    Public Bank Malaysia Public Bank Islamic
    Islamic:RM100,000 and above.
    Pegged to base financing rate at 6.72% p.a.
    Up to RM212.
    RHB Malaysia RHB
    Up to RM400,000.
    Up to 4.75% p.a.
    RM212.

    Home Loan Overview

    For many, owning a home is a long-term goal and one which can’t easily be realised without the aid of a home loan. Here’s a complete guide to help you understand all you need to know about financing your home.

    Types of Home Loans

    There are different types of home loan packages offered by various banks in Malaysia which are as follows.

    Conventional Home Loan: It is a standard home loan offered by a bank that involves either fixed or floating interest rates. The interest is paid on a monthly basis on the principle amount that you have borrowed from the bank. With the variable interest rate facility, your monthly instalments may fluctuate if there are any changes to the interest rate of the loan. In fixed interest facility, you will pay the same instalment amount throughout your tenure.

    Flexi Home Loan: A flexi home loan is similar to the conventional home loan. The loan allows for excess payments and also allows you to withdraw them at any given point of time. Moreover, your current account is linked to the loan account and as such, allows for easier repayment through auto-debit.

    Islamic Home Financing: This type of financing works on the Islamic principle of banking that includes concepts like Bai’ Bithaman Ajil (BBA) and Musharakah Mutanaqisah (MM).

    • Bai’ Bithaman Ajil (BBA) Home Financing: A buy-and-sell concept is used in this type of home financing where the bank buys a property for you at the current market price and sells it back to you at an agreed price. The price that you purchase the property from the bank consists of a mark-up for the bank’s profit.
    • Musharakah Mutanaqisah (MM) Home Financing: This type of financing works on the concept of partnership between the bank and you (applicant). The bank buys a property and leases it out to you until you own the property completely by paying the instalments. Here, you pay the rental to the bank as per the Ijarah concept.
    housing loan malaysia

    Features And Benefits Of Home Loans

    The home loan schemes offered by different banks in Malaysia come with an array of features and benefits which are as follows:

    • Homes loans are offered in conventional or Islamic formats.
    • You can get a home loan for a completed home/property, under-construction house and also for a shophouse.
    • Refinancing facility is also available with many home loan schemes in Malaysia.
    • Many banks offer the facility to make or withdraw excess payments any time via multiple easy methods such as online transaction, ATMs or through cheques.
    • You can access the facility of consolidating your current account, salary account and home financing account into one easy-to-manage account.
    • It offers flexible tenures.
    • Loans are open to residents and non-residents alike.
    • The home loan schemes are available on a variable or fixed interest rate basis.
    • You can take a home loan to buy a house or use the loan amount for investment purpose.
    • Home loans are secured types of loans. When you take a home loan, the property which is being financed will be the collateral.
    • Home loans are available for individuals as well as joint applicants.

    Banks Offering Home Loans In Malaysia

    The following is the list of banks offering home loans in Malaysia:

    • Affin Bank: Affin Bank offers a range of 7 home loan packages for you to choose from. The maximum amount obtainable through this facility is RM5 million. You can choose from a flexible range of tenures available with this loan facility.
    • Alliance Bank. The loan comes with a maximum financing of RM5 million. The financing term associated with the loan can be extended to 35 years.
    • Ambank: Ambank provides you with home loan with flexible repayment tenures and financing up to 95% of the property’s valuation. The financing facility comes at both fixed and variable interest rate.
    • Bank Islam: Coming with a maximum of 35 years of repayment tenure, the home loans provided by Bank Islam come with a high range of financing for property purchase. The facility also offers a takaful coverage for the entire loan term.
    • Bank Muamalat: Bank Muamalat home loan comes with no processing fee and high margin of financing for property purchase. The maximum limit of financing offered by the facility is 90% of the property’s price. The facility also comes with a flexible range of tenures for you to choose from.
    • Bank Rakyat: Bank Rakyat offers 5 home loan packages for both completed as well as under-construction properties. The loan has a maximum financing range of up to 110% of the property’s valuation.
    • Bank Simpanan Nasional (BSN): BSN provides you with home loan packages that cover fully-constructed and under-construction properties. The loan comes with financing up to 100% of property valuation. You can choose from a range of tenures that has a maximum limit of 35 years.
    • CIMB Bank: CIMB Bank provides you with 8 types of packages under home loan. You can choose the best fit for you according to your financial needs. You can also earn 0.1 bonus point against every RM1 financed through CIMB home loan. The maximum amount that you can get via this financing facility is 100% of the property’s valuation.
    • Hong Leong Bank: Hong Leong offers a wide range of housing loan packages that has a maximum financing limit of 100% of the valuation of the property. You can also choose from a flexible range of tenures according to your needs.
    • Kuwait Finance House: Kuwait Finance House offers home loan facility that comes with a high range of financing. The loan tenure can be extended to 35 years.
    • Maybank: Maybank provides you with a high financing range for property purchase at a range of competitive rates. Coming with financing range of up to 90% of the property’s valuation, the loan also has a repayment tenure that is extendable to 35 years.
    • OCBC Bank: OCBC provides you with home loan packages that have a maximum repayment tenure of 40 years. You can obtain up to 90% of property’s valuation with this loan facility. The loan facility also comes with a number of packages you can choose from according to your financing needs.
    • Public Bank: Public Bank offers home loans that come with a financing amount of RM100,000 and above. The loan facility comes with a flexible range of repayment tenures and redraw facility.
    • RHB: RHB home loan comes with financing amount of up to RM400,000. The repayment tenures associated with the financing facility can be extended to 35 years. The funds obtained come at a competitive interest rate.

    Housing Loan Eligibility Criteria

    The eligibility criteria for obtaining the home loan in Malaysia are as follows:

    • Nationality Criterion: Malaysian citizen or foreign nationals with valid work permit and visa.
    • Age Criteria:
      • Minimum Age: 18 years
      • Maximum Age: Up to 75 years old (at the time of completion of the tenure)
    • Minimum income requirement criterion should be followed as per the bank’s discretion which depends on the financing scheme that you have applied for.
    • For joint applications, the applicants must be direct relatives such as a spouse, a child, parents, or siblings.

    Documents Required For A Home Loan

    For an individual or joint applicant:

    • A copy of NRIC (both front and back sides)
    • Payslips - original draft and copy for latest 3 months
    • Latest bank statement for 3 months
    • Latest EPF statement
    • Confirmation Letter from the employer
    • J Form / Latest Income Tax Declaration
    • Copy of Sale and Purchase Agreement and/or other property documents
    • Copy of Evaluation Report (for property purchase) from panel valuer registered with the bank

    For a self-employed applicant:

    • A copy of NRIC (both front and back sides)
    • Latest bank statement for 6 months
    • Latest EPF statement
    • Business Registration Certificate (if applicable)
    • J Form / Latest Income Tax Declaration
    • Copy of Sale and Purchase Agreement and/or other property documents
    • Copy of Evaluation Report (for property purchase) from panel valuer registered with the bank

    For an organization:

    • Organisation’s bank statement for the period of 6 months
    • Organisation’s financial statement for last 2 years validated by an authorised audit body
    • B/BE form and LHDN receipt
    • Business Registration Certificate (SSM)
    • Memorandum and Articles of Association (M and A) / Form 24, Form 44 and Form 49
    • Board of Director Resolution

    For a foreign applicant working in malaysia (salaried or self-employed):

    • A copy of your identity card or passport
    • Working Permit (if any) or PR card with validity of minimum 6 months and above
    • Property booking receipt
    • A copy of the Sales and Purchase Agreement or title
    • Latest salary slips for minimum 3 to 6 months
    • Latest bank statements for minimum 3 to 6 months
    • Employment or validation letter by the employer or the latest KWSP statement
    • Latest income tax declaration form with payment acknowledgement receipt
    • Deposit statement such as fixed deposit, ASB or other bonds (if applicable)

    For a malaysian applicant working overseas (salaried or self-smployed):

    • Copy of NRIC or Malaysian Identity Card
    • Working permit (if any)
    • Booking receipt for the property (1 copy)
    • Vendor Sale and Purchase agreement or title copy or new sales and purchase agreement
    • Latest Personal bank statements for 6 months
    • Latest profit and loss statements (if applicable)
    • Business registration certificate (if applicable)
    • Latest deposit statements; for example, fixed deposit, ASB or bonds (if any)
    • Any other document as requested by the bank or finance institute.

    How To Apply For A Home Loan

    Offline Application: You can go to the nearest branch of the bank that you wish to get the loan from and fill in the application form. You need to submit the supporting documents required along with the completed application form.

    Online Application: Some banks allow you to either apply for the loan on their website. You are required to fill in key fields of information and submit the required supporting documents and a bank representative will get in touch with you and carry the process forward. Certain banks will allow you to express your interest in acquiring a home loan by filling in your details on a particular page. Upon doing so, a bank representative will reach out to you and initiate the application process.

    Home Loan Interest Rates

    Bank Name Interest Rates (Estimated)
    Public Bank Home Loan 4.35% p.a.
    BSN Home Loan Floating rate pegged to the bank rate
    RHB Home Loan 4.75% p.a.
    Bank Islam Home Loan Floating rate pegged to the bank rate
    AIA Home Loan 4.99% p.a. to 5.15% p.a.
    Bank Rakyat Home Loan Floating rate pegged to the bank rate
    Affin Bank Home Loan Floating rate pegged to the bank rate
    HSBC Home Loan Floating rate pegged to the bank rate
    AmBank Home Loan Floating rate pegged to the bank rate
    OCBC Home Loan Floating rate pegged to the bank rate
    CIMB Home Loan 4.95% p.a. to 5.35% p.a.
    Hong Leong Home Loan Floating rate pegged to the bank rate
    CIMB Islamic Home Loan 4.4% p.a. to 6.95% p.a.
    Maybank Home Loan Floating rate pegged to the bank rate

    Home Loan Calculator

    A Home Loan Calculator tab is available on most of the banks’ official websites. The calculator helps you to get an estimation of the monthly instalment to be paid. You are required to enter key fields of data such as desired loan amount, the interest rate and the tenure to get your monthly instalment estimate.

    Fees And Charges Of Home Loan

    Following are the basic fees and charges associated with home loans:

    Home Loan/Home Financing Type of Fees and Charges
    Stamp Duty Charges 0.5% of total financing amount as per the Stamp Duty Act 1949 (Revised in 1989)
    Processing Fee As per the bank’s discretion (Often waived for new customers or as a special privilege)
    Disbursement Fee As per the bank’s discretion (Includes registration fee, stamping fee etc.)
    Legal Fee (pertaining to securities documentations) As per the bank’s discretion
    Valuation Fee As per the bank’s discretion (Applicable to completed properties only)
    Late Payment Charges Commonly charged at 1% p.a. on the amount in arrears  
    Early Settlement Fee As per the bank’s discretion

    Home Loan Application Approval Process

    Once you have made the application for a home loan, there are a few steps involved until you get the approval for the same. Let’s have a look at the procedure involved:

    Application Form Assessment: When an applicant submits the application form to the bank, the bank representatives look into the form and check if all the required fields/information is filled. You are requested to make the application again if there are any mistakes or incomplete information given.

    Valuation of Documents: The bank then go on evaluating each document submitted by you. The documents are checked against the factors such as their validity, background check of the information given, tallying of one document with another if necessary and the authenticity of them.

    Credit Assessment: This is one of the main criteria where the approval or disapproval of the loan is decided. The bank checks your credit score that depends upon your spending habits, investments, savings and your loaning history if any. A negative credit assessment can deny a loan to a customer whereas a healthy credit score can land you a loan.

    Final Call of Approval or Disapproval: After passing through every stage with scrutiny, the bank then decides whether to grant a home loan to you or not.

    House Loan vs Mortgage

    There is a thin line between a home loan and a mortgage. To understand the exact different between the two, one needs to know the definitions of both. A home loan is a loan/financing given by a bank to a borrower for obtaining a residential property or a house. In a home loan, the home or property acts as a collateral so that the loan can be secured against it. If a borrower fails to repay the loan amount, the bank or finance institute can seize the property. Whereas, a mortgage is a type of loan where the borrower needs to give a property or any other security as a mortgage. Here, the mortgage could be anything from a land and insurance to gold.

    House Loan Refinance

    Refinancing is commonly referred to the type of loan that is borrowed to pay off other loan. Through refinancing, an old loan is cleared out with the help of a new loan that offers different terms and features. Read below how refinancing can benefit you and provide financial security:

    • It helps in debt consolidation
    • You can decrease your monthly repayment instalments by opting for a refinancing
    • Refinancing also helps in paying an old loan quickly and reduce the loan tenure considerably
    • You can also combine first and second mortgage
    • It also helps to reduce the overall interest that you have been paying on your existing loan
    • You can conveniently shift from a conventional loan scheme to an Islamic loan type or vice a versa with the help of refinancing
    • It is helpful in eradicating MRTA mortgage insurance.

    Guide to Choose the Right Home Loan

    Here’s a guideline to help you choose the ideal home loan in Malaysia:

    • Repayment Capacity: While applying for a certain amount of financing, make sure that you have the capacity and resources to pay it back. The longer tenures involved in a home loan can result in a lot of interest you’d have to pay over the tenure.
    • Down Payment: Make sure you put enough of a down payment. This will reduce the actual finance amount you actually need and will help make repayment easier. Do not take a loan for the down payment as well. use your savings or save up for a while before taking on the commitment of a home loan.
    • Fees and Charges Applied: Be familiar with all the fees and charges that the home loan carries with it. Left overlooked, they can drastically increase the overall cost of the loan and can make repayments a long and arduous task.
    • Interest Rates: Interest rates/profit rates charged by different banks can have a profound impact on the affordability of the loan. Choose an interest rate that can keep your instalments in check and well within your ability to repay.

    Click here to read the full guide on home loans.

    FAQ's

    Q. How long can a loan approval procedure take?

    A. Approval period and disbursal may take up to 7 business days. The approval and disbursal time is also affected by loan amount, tenure, the bank from which the loan is being acquired and the eligibility of the candidate.

    Q. How is the monthly repayment instalment amount calculated by a bank for a home loan scheme?

    A. The monthly repayment instalment is based on the amount financed, loan tenure and the profit or interest rate associated with the scheme. You can get an estimate of the monthly instalment amount by using the calculator tool on the bank’s official website or a bank representative will inform you about the same during the application process.

    Q. Can I make additional payments on my home loan apart from the regular monthly instalments?

    A. Yes, you can provided the bank offers the facility. The additional payments made by you can be withdrawn any given point of time if you are in need of some cash.

    Q. Can I get a home loan with a joint applicant who is a self-employed individual?

    A. In this process, the joint applicant needs to provide valid proof of identity and income as asked by the bank. If his/her income criteria does not match the bank’s designated eligibility, there is a chance that your loan application might get rejected.

    Q. What could be the possible effects if and when I won’t be able to repay my loan?

    A. The bank or finance institute that you have taken the loan for, may seize your asset that you have secured for the amount financed. However, the bank will send you notices and reminders initially on your missed repayment instalments.

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