Margin of financing
Margin of financing is the percentage of the property price the bank will lend you.
| Housing loan | Maximum loan | Down payment |
|---|---|---|
| 1st and 2nd housing loan | Up to 90% | From 10% |
| 3rd housing loan onwards | Up to 70% | From 30% |
The bank values the property independently. If the valuation is lower than the price, the loan is based on the lower figure and you pay the difference in cash.
Debt Service Ratio (DSR) and loan approval
Banks check whether you can afford the instalment using your Debt Service Ratio — your total monthly loan repayments divided by your net monthly income. Most banks accept a DSR of around 40%–70% depending on income level. They also review your CCRIS and CTOS credit records, employment and supporting documents.
- Salaried: latest 3–6 months payslips, EA form, bank statements, EPF statement.
- Self-employed: business registration (SSM), 6 months bank statements, Form B / tax returns.
Estimate your budget with the Affordability Calculator.
Interest rates and tenure
- Most home loans are floating rate, priced at the bank's Standard Rate (SR) plus or minus a spread. When Bank Negara changes the Overnight Policy Rate (OPR), your rate usually changes too.
- The maximum tenure is usually 35 years or until age 70, whichever comes first.
- Many loans have a lock-in period (often 3–5 years) with a penalty for full early settlement.
- Flexi or semi-flexi loans let you pay extra to reduce interest, sometimes for a small monthly fee.
Upfront buying costs
Besides the down payment, set aside money for:
- Stamp duty on the MOT and loan agreement
- Legal fees and disbursements for the SPA and the loan agreement (based on the Solicitors' Remuneration Order scale)
- Valuation fee (often absorbed by the bank under some packages)
- Optional MRTA / MLTA mortgage insurance, which can be financed into the loan
- Utility deposits, renovation and furnishing
Example: RM 500,000 home, 90% loan at 4% for 35 years
Down payment (10%): RM 50,000
Loan amount: RM 450,000
Stamp duty: RM 9,000 (MOT) + RM 2,250 (loan) = RM 11,250
Monthly instalment: about RM 1,992
Cash needed before legal fees: about RM 61,250
First-time buyers of homes up to RM500,000 may be exempt from the stamp duty.
Buying process for a sub-sale property
| Step | What happens |
|---|---|
| 1. Offer & booking | Sign the Letter of Offer and pay an earnest deposit (usually 2%–3%). |
| 2. Loan application | Apply to banks; approval usually takes 1–3 weeks. |
| 3. Sign the SPA | Usually within 14–21 days. Pay the balance of the 10% deposit. |
| 4. Stamp duty & loan documents | Lawyers stamp the SPA, MOT and loan agreement. |
| 5. Completion | Balance paid within 3 months of the SPA, plus a 1-month extension (with interest) if needed. |
| 6. Handover | Receive the keys once the full price is paid to the seller. |
New projects from developers follow a different schedule: you pay progressively as construction progresses under the Housing Development Act.
Calculate your instalment with the Home Loan Calculator, or browse properties for sale in Johor Bahru.