Mortgages - Malaysia

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

Brokers and property purchasers in Malaysia say Malaysian banks are eager to issue mortgages to overseas citizens. Mortgages are generally issued up front and local terms are often very liberal when compared to other countries, while some people can even secure up to 90% finance.

Although recent conditions have pushed interest rates to 6.75% from about 6% at the start of 2006, Kuala Lumpur has still seen a boom in the kind of high-end condominium development that expatriate buyers and renters demand.

As a foreigner, you are normally allowed to borrow up to 70% and in most cases, Malaysian banks are more than willing to finance your purchase. Loans are granted on the proviso that the property value is RM 250,000 or more. There is no upper limit to the cost of properties that may be purchased by overseas purchasers of property in Malaysia. The current base lending rate is 6.8% per annum (end 2006). Loans are for a maximum period of 45 years or up to age 75, whichever is earlier.

The mortgage application process for foreigners can sometimes take longer than in many other countries 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. For this reason, overseas investors who require a mortgage to purchase their property often consider raising finance outside Malaysia as this will speed up the buying process.

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

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.

Click here to get a mortgage quote for a property in Malaysia

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