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Mortgages In Malaysia

Mortgages are readily available to foreigners from international and Malaysian banks. Below is an overview of the mortgage situation and lending climate in Malaysia.


Brokers and property purchasers in Malaysia confirm that Malaysian banks are eager to issue mortgages to overseas citizens. Repayment mortgages are generally issued up front and local terms are often very liberal when compared with other countries.

Interest rates

Interest rates are currently amongst the lowest in Asia, at 3.5% (Sept. 2008), and despite Malaysian inflation now hitting 8.5% (Sept. 2008), the central Bank Negara will not be raising interest rates.

The recent financial turmoil of the giant American International Group Inc. (AIG) will not be affecting its Malaysian operations, AIA, due to the fact that they are a locally incorporated company and assets are invested locally. Meanwhile a spokesman for Bank Negara reassures: “we will closely monitor all financial institutions under our review and take all the necessary actions to maintain the stability of our banking and insurance industry”.

Up to 80% LTV Malaysian Ringett mortgages are granted on the proviso that the property value is MYR 100,000 or more. Depending on the lender, terms can range from 5 to 30 years, or up to 60 or 65 years of age. Interest rates can be fixed, capped or variable.

Mortgage Application Process

The mortgage application process for foreigners can take approximately 2 to 3 weeks but it sometimes takes longer and you would be well advised to extend the three month period from your initial deposit payment to final signature of the Sale and Purchase Agreement, to allow for normal delays in obtaining your Malaysian loan.

Non-status/self-certification mortgage facilities are not available in Malaysia; therefore, you will need to prove your income:

  • Employed borrowers - last six months pay slips; P60; employer’s reference; and your last 6 months personal bank statements.
  • Self-employed borrowers - copies of your audited accounts; last 12 months business and 6 months personal bank statements.

Costs

The banks typically charge an arrangement fee of 2% and your repayments are on a capital and interest or interest only basis.

Some off-plan developments offer finance options and installment plans. The charges applicable vary according to developer and repayments are usually indexed.

Click here to get a quote for a Malaysian mortgage

If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance.

Please click here to speak with an advisor who can give accurate figures for your personal circumstances.

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