If you are searching for "mortgage calculator Malaysia," you are likely comparing property costs or checking whether you can afford a specific property. In Malaysia, the terms "mortgage," "home loan," and "housing loan" all refer to the same product — a reducing-balance term loan secured against property. This guide covers how mortgages work, current rates, and worked examples at three price points.
How Mortgages Work in Malaysia
A Malaysian mortgage is a reducing-balance term loan where you borrow a lump sum and repay in fixed monthly instalments over 20-35 years. Interest is calculated on the outstanding balance each month.
Key terms for international readers:
- Charge — the legal term for a mortgage in Malaysia under the National Land Code 1965. Your property title is "charged" to the bank until the loan is fully repaid.
- SBR (Standardised Base Rate) — equivalent to a base rate. Set at 2.75% for all banks, tied to the BNM Overnight Policy Rate (OPR) of 2.75%.
- Spread — the bank's margin above SBR. Ranges from 1.45% to 1.85%, giving effective rates of 4.20%-4.60%.
- LTV (Loan-to-Value) — maximum 90% for your 1st and 2nd property. 70% for 3rd property onwards per BNM guidelines.
- Tenure — maximum 35 years, but the loan must be fully repaid by age 65 (most banks) or age 70 (some Islamic banks).
- Stamp duty — 0.5% of the loan amount, payable at signing. This is separate from MOT stamp duty on the property transfer.
Conventional vs Islamic Mortgage
Malaysia offers both conventional and Islamic (Shariah-compliant) mortgages. Both achieve the same outcome — you finance a property purchase and repay in monthly instalments — but the legal structure differs.
| Feature | Conventional | Islamic |
|---|---|---|
| Structure | Interest-based loan (charge) | Sale-based or partnership (Tawarruq, BBA, Musharakah Mutanaqisah) |
| Rate mechanism | SBR + spread = effective rate | Base financing rate + profit margin = profit rate |
| Effective rate | 4.20% - 4.60% | 4.25% - 4.65% |
| Ceiling rate | None — rate floats with OPR | Yes — maximum rate declared upfront |
| Early settlement | No penalty after lock-in period | Ibra' (rebate) at bank's discretion |
| Late payment | Compound interest on arrears | Ta'widh (compensation) — typically 1% p.a. on overdue |
| Stamp duty | 0.5% of loan | 0.5% of financing amount |
| Governance | BNM + National Land Code | BNM + Shariah Advisory Council |
The practical difference in monthly payments is typically RM 10-30 per RM 100,000 financed. The main advantage of Islamic financing is the ceiling rate — your profit rate cannot exceed a declared ceiling, providing protection if BNM raises the OPR significantly.
For a detailed comparison, see our Islamic vs Conventional Property Financing guide.
Current Mortgage Rates 2026
| Bank | Conventional Rate | Islamic Rate | Lock-in | Max Tenure |
|---|---|---|---|---|
| Hong Leong | 4.20% | 4.25% | 5 years | 35 years |
| RHB | 4.25% | 4.30% | 3 years | 35 years |
| CIMB | 4.30% | 4.35% | 5 years | 35 years |
| Maybank | 4.35% | 4.40% | 3 years | 35 years |
| Public Bank | 4.40% | 4.45% | 3 years | 35 years |
| Bank Islam | — | 4.35% | 3 years | 35 years |
| MBSB Bank | — | 4.30% | 5 years | 35 years |
Rates are indicative and vary based on credit profile, property type, and loan amount. Apply to 2-3 banks simultaneously for the best offer.
For the latest rate comparison, see Home Loan Interest Rates Malaysia 2026.
Looking at specific properties? We've screened 1,000+ condos across 8 states for cashflow.
See 1,000+ pre-screened properties →Worked Examples: RM400K, RM600K, RM1M
RM400,000 Property
| Item | Value |
|---|---|
| Property price | RM 400,000 |
| Down payment (10%) | RM 40,000 |
| Loan amount (90% LTV) | RM 360,000 |
| Interest rate | 4.50% |
| Tenure | 30 years |
| Monthly instalment | RM 1,824 |
| Total interest over 30 years | RM 296,640 |
| Total cost (principal + interest) | RM 656,640 |
DSR check: Minimum net income of RM 3,040/month at 60% DSR.
RM600,000 Property
| Item | Value |
|---|---|
| Property price | RM 600,000 |
| Down payment (10%) | RM 60,000 |
| Loan amount (90% LTV) | RM 540,000 |
| Interest rate | 4.50% |
| Tenure | 30 years |
| Monthly instalment | RM 2,736 |
| Total interest over 30 years | RM 444,960 |
| Total cost (principal + interest) | RM 984,960 |
DSR check: Minimum net income of RM 4,560/month at 60% DSR.
RM1,000,000 Property
| Item | Value |
|---|---|
| Property price | RM 1,000,000 |
| Down payment (10%) | RM 100,000 |
| Loan amount (90% LTV) | RM 900,000 |
| Interest rate | 4.50% |
| Tenure | 30 years |
| Monthly instalment | RM 4,560 |
| Total interest over 30 years | RM 741,600 |
| Total cost (principal + interest) | RM 1,641,600 |
DSR check: Minimum net income of RM 7,599/month at 60% DSR. At this level, most buyers use joint applications.
For foreigners: At 60-70% LTV (typical for non-residents without MM2H), the RM1M property requires RM 300,000-400,000 in cash — significantly higher upfront capital. Monthly instalment on a 60% LTV loan (RM 600,000) is RM 3,040.
Mortgage Eligibility: DSR Check
Banks use the Debt Service Ratio (DSR) to decide whether to approve your mortgage. DSR = total monthly debt commitments / net monthly income. Most banks approve up to 60-70%.
| Property Price | Loan (90%) | Monthly Payment | Min Net Income (60% DSR) |
|---|---|---|---|
| RM 400,000 | RM 360,000 | RM 1,824 | RM 3,040 |
| RM 500,000 | RM 450,000 | RM 2,280 | RM 3,800 |
| RM 600,000 | RM 540,000 | RM 2,736 | RM 4,560 |
| RM 800,000 | RM 720,000 | RM 3,648 | RM 6,080 |
| RM 1,000,000 | RM 900,000 | RM 4,560 | RM 7,599 |
All at 4.50% over 30 years, assuming no other debt commitments.
Existing debts (car loans, personal loans, credit card minimum payments) reduce your available DSR. Each RM 500 in monthly commitments reduces borrowing capacity by approximately RM 100,000.
For the full eligibility guide, see Home Loan Eligibility & DSR Malaysia.
Tips to Get Your Mortgage Approved
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Clean your CCRIS/CTOS. Late payments in the last 12 months significantly reduce approval odds. Pay down credit card balances below 50% utilization before applying.
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Apply to 2-3 banks simultaneously. Rates are negotiable. Banks compete for quality borrowers. A letter of offer from one bank is leverage at another.
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Get pre-approved first. A pre-approval letter confirms your maximum loan before you commit to an SPA. This prevents financing rejection after signing.
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Choose the right tenure. Longer tenure (35 years) = lower monthly payments but more total interest. Shorter tenure (20 years) = higher payments but massive interest savings. At RM 600K/4.50%: 20 years costs RM 3,421/month but saves RM 175,800 in total interest versus 30 years.
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Consider a joint application. Two incomes significantly increase DSR capacity. Many Malaysian couples apply jointly to qualify for properties they could not afford individually.
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Foreigners: bring documentation early. Malaysian banks require foreign applicants to provide employment contracts, visa copies, bank statements, and tax returns from their home country. Start gathering documentation before property hunting.
Use our Mortgage Calculator to run your exact numbers.