A Personal Finance Blog for Malaysian: Loan of 100% of the property value

Wednesday, October 20, 2010

Loan of 100% of the property value

Quite a surprise that this policy was made by the BN government to help the low income earner to buy their first home.

If you earn below RM3,000 (may be RM2,999.99) and qualify for this, what would you do?

Assumed you earn almost RM3,000 and get a maximum 100% loan of RM220,000 and interest rate move to 5.00% .... your installment (RM1,181) to income ratio (RM2,655)  is 44.48% - quite a high ratio for any bank to accept.

Therefore, it will be advisable to look for property value RM200,000 and below.

Anyhow, lets wait and see the detail guideline on this policy.

Will this policy accelerate the forming of property bubble or create a different level of bubble?

* Some people are expecting the BLR will be adjusted (upward) again in year 2011.


  1. 44.48% ratio is acceptable for most of the banks in Malaysia.

    Sustainable rental income (break even / positive cash flow) is a good start to build a good record of credit score with banks other than being a good paymaster by clearing all the personal loan, credit card payment, and etc on time.

  2. Confirmed with an experienced mortgage consultant, bank can accept up to commitment to loan ratio of 85%, i.e. including all other commitments like personal loan, hire purchase etc - however, no need to eat? no need to pay electricity? no need to spend? This budget likely for a flat or condo, you still need to incur maintenance fee etc.

    I am afraid most people will end up become "house slave" and work for bank and developer.

  3. for a fresh gruduate or a normal income group surely cant afford to get a property cause property are boosting. if for wealthy group, they can just fork out money to invest but for normal income group will definately suffer. buying a property for normal income group must think carefully because they not easily can come up with money to pay for installment. the policy can help if the property is selling below rm200k but even a condo is selling more than that now so how normal income group can afford a house. even condo rental is a month of a normal income's salary. they cant even rent the house then how they gotta pay for others expenses and wat about saving?they got no extra cash for saving. those that can afford property are only those are rich, they buy n sell to get profit but those normal income group work their whole life to pay for installment and cant get any other opportunity to do other things. is there any solutions?

  4. The problem of home-affordability is not only happen in Klang Valley but almost all major cities.

    The best solution is MAKE MORE MONEY as fast as much as you can.

    Can't wait or hope the BN government will help you. (But Singapore government is doing quite well with HDB, right?)

  5. yea not only klang valley! its not easy to make more money fast cause the cost of living is also high. government has to do something or else only rich ones owned property. i felt the policy is unacceptable. property is growing way too fast man!

  6. it's the unavoidable trend of capitalism. Look at all developed Asian cities - HK, Singapore, Taipei, Seoul, Beijing. And look at all the other major cities in the Western world (Paris, London, NY). They are all owned by rich and only rich can continue owning them.
    By comparison, you can still find affordable house price in KL compared to the cities above.
    what else can we say?



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