Buying a house in Malaysia involves 5 key stages: Checking Loan Eligibility (DSR), Property Search, Signing the SPA, Loan Acceptance, and Key Collection. Here is the complete roadmap for first-time buyers.
Your Debt Service Ratio (DSR) determines how much you can borrow. Banks typically require your total monthly commitments to be below 60-70% of your net income. Use online DSR calculators to estimate your loan eligibility before house hunting.
Decide between buying a new launch property directly from developers or a sub-sale (secondary market) property. Each has distinct advantages in terms of pricing, waiting time, and upfront costs.
Once you've found your property, you'll pay a booking fee (typically 2-3% for new launches) and receive a Letter of Offer. For sub-sales, you'll sign a Letter of Offer to Purchase (LOP).
The Sale and Purchase Agreement (SPA) is the legally binding contract. You'll also finalize your bank loan, sign the loan agreement, and pay the remaining downpayment (typically 10% minus booking fee).
After the Memorandum of Transfer (MOT) is stamped and registered, you'll complete the final payment handover. For new launches, attend the handover session to inspect for defects before collecting your keys.
DSR (Debt Service Ratio) is calculated by dividing your total monthly commitments by your net income. For example, if your net income is RM5,000 and your monthly commitments (car loan, credit cards, personal loans) total RM2,000, your DSR is 40%. Banks typically approve loans for borrowers with DSR below 60-70%. To improve your DSR, consider paying off smaller debts before applying for a home loan.
Hidden costs include: Legal Fees (typically 0.5-1% of property price), Stamp Duty on MOT (up to 4%), Stamp Duty on Loan Agreement (0.5%), Valuation Fees (RM300-1,500), MRTA/MLTA Insurance (varies by age and loan amount), Fire Insurance, and Maintenance Fees for strata properties. Budget an additional 5-8% of the property price for these costs.
It depends on your priorities. Choose New Launch if you: want lower upfront costs, can wait 2-4 years, prefer brand new units with warranty. Choose Sub-sale if you: need to move in quickly, want matured neighborhoods with amenities, prefer negotiating on price. Sub-sales require more upfront cash but offer immediate occupancy.
The standard minimum downpayment is 10% of the property purchase price. However, first-time buyers may qualify for 100% financing from certain banks for properties under RM500,000. Note that even with 100% financing, you'll still need cash for legal fees, stamp duty (unless exempted), and valuation fees.
For sub-sale properties: 3-6 months from SPA signing to key collection. For new launch properties: 2-4 years from booking to completion, depending on construction progress. The loan approval process typically takes 1-2 weeks, while SPA signing and legal processes take 3-4 weeks.
Essential documents include: IC/Passport, Latest 3-6 months payslips, Latest EPF statement, Bank statements (3-6 months), EA Form or Income Tax returns (Form BE), Employment confirmation letter, and the property's Sale & Purchase Agreement. Self-employed individuals will need business registration documents and audited accounts.
While results vary, our clients have seen monthly commitments slashed by 30% to 50%.