How much will my mortgage payment be in Malaysia ?

If you’re looking to buy a home in Malaysia, your biggest question is probably, “How much will I have to pay the bank each month?” Understanding this figure is the first step to confident homeownership. This guide is built for you—the prospective Malaysian homebuyer—to demystify the numbers and show you exactly how to calculate your mortgage payment.

For a quick answer: on a RM 500,000 home with a 10% down payment (a RM 450,000 loan) over 30 years at a 4.5% interest rate, your estimated monthly mortgage payment would be around RM 2,280.

How to Calculate Your Monthly Mortgage Payment

So, how do you figure out your exact monthly commitment? Banks use a standard formula. Here’s a simple, step-by-step guide to calculating it yourself.

The Mortgage Payment Formula:

M=P[i(1+i)n]/[(1+i)n–1]

• M: Your monthly payment.
• P: Your total loan amount (the property price minus your down payment).
• i: Your monthly interest rate (take the annual rate and divide by 12).
• n: Your total number of payments (the loan tenure in years x 12).

A Real-Life Example: Aina Buys Her First Condo

Let’s walk through a practical scenario to see how this works.

Use Case: Aina wants to buy her first condo in Kuala Lumpur.

• Property Price: RM 480,000
• Her Down Payment (10%): RM 48,000
• Total Loan Amount (P): RM 432,000
• Bank’s Interest Rate: 4.2% per year (so, i = 4.2% / 12 = 0.0035)
• Loan Tenure: 35 years (so, n = 35 x 12 = 420 months)

Calculation Output:

Plugging these numbers into the formula, Aina’s estimated monthly mortgage payment (M) would be approximately RM 2,015. This is the core figure she needs to budget for each month.

What Key Factors Influence Your Payment?

Your final monthly payment is determined by four main factors. Understanding each one helps you see where you have flexibility.

• Property Price & Down Payment: Malaysian banks typically finance up to 90% of a property’s value for your first two homes. This means you must have at least a 10% down payment saved up. A larger down payment means a smaller loan and lower monthly payments.
• Loan Tenure (Duration): In Malaysia, the maximum tenure is 35 years or until you turn 70, whichever comes first. A longer tenure reduces your monthly payment but means you pay more in total interest over the years.
• Interest Rate: As of mid-2025, mortgage interest rates in Malaysia generally range from 3.90% to 5.20% p.a. This rate is based on the bank’s assessment of your financial health and the prevailing Standardised Base Rate (SBR). It’s wise to get quotes from several reputable banks like Maybank, CIMB, and Public Bank to find the best offer.

Don’t Forget the Upfront Costs: It’s Not Just the Down Payment

When you buy a property, you’ll face several one-time fees. Budgeting for these is crucial to avoid surprises.

• Stamp Duty: A tax on your legal documents.
  • Sale & Purchase Agreement (SPA): Taxed based on the property’s price. Good news for first-time buyers: until 2025, there’s a full stamp duty exemption for properties up to RM 500,000.
  • Loan Agreement: A flat rate of 0.5% on your total loan amount.
• Legal Fees: Fees for the lawyers who handle the SPA and loan documents. These are calculated based on a regulated scale.
• Valuation Fees: A fee paid to a professional valuer to confirm the property’s market price for the bank.

Understanding Your Mortgage Insurance: MRTA vs. MLTA

Banks require insurance to protect the loan. You have two main choices:

• MRTA (Mortgage Reducing Term Assurance): A basic, cheaper policy where the coverage amount decreases as you pay down your loan. Its primary purpose is to protect the bank by paying off the outstanding loan if you pass away.
• MLTA (Mortgage Level Term Assurance): More like a life insurance policy. The coverage amount stays the same throughout the loan tenure. If you pass away, it pays off the bank loan, and any remaining cash balance goes to your family.

Frequently Asked Questions (FAQ)

1. What is a good interest rate for a mortgage in Malaysia?

As of mid-2025, a competitive interest rate would be between 3.90% and 4.40% p.a. Anything below 4.0% is excellent. Your final rate depends on your credit score, income stability, and relationship with the bank, so it pays to compare offers from multiple lenders.

2. How much down payment do I really need in Malaysia?

Legally, you need a minimum of 10% of the property’s purchase price. However, paying a larger down payment, like 15% or 20%, is highly recommended. It reduces your loan amount, lowers your monthly payments, and can help you secure a better interest rate from the bank.

3. Can I get a 100% loan to buy a house in Malaysia?

Typically, 100% financing is rare and reserved for specific government schemes like the Skim Rumah Pertamaku (My First Home Scheme). For most conventional loans, banks require a minimum 10% down payment. Check if you qualify for any government housing initiatives.

4. What is the maximum loan tenure I can get?

The maximum loan tenure in Malaysia is 35 years or until the borrower reaches the age of 70, whichever comes first. If you are 40 years old, the maximum tenure you could get would be 30 years (until age 70).

5. How do banks decide if I am eligible for a loan?

Banks primarily look at your Debt Service Ratio (DSR), which should not exceed 60-70% of your net income. They also check your CCRIS report for your credit history, your employment stability, and your income level to ensure you can reliably make payments.

6. Should I choose a fixed-rate or variable-rate loan?

In Malaysia, most home loans are variable-rate, pegged to the Standardised Base Rate (SBR). This means your payment can change if the SBR changes. Fixed-rate loans are uncommon and usually more expensive, but they offer predictable payments that never change.

7. Why is my approved loan amount lower than what I applied for?

This can happen if the bank’s valuation of the property is lower than the purchase price, or if your income or credit score doesn’t fully support the requested amount. Banks will only finance up to 90% of their valuation, not necessarily the selling price.