Complete Home Loan Guide for First-Time Buyers Malaysia 2025
Everything you need to know about applying for your first home loan in Malaysia - from eligibility requirements to document checklists and step-by-step process.
Buying your first home is an exciting milestone, but the home loan application process can seem overwhelming. This comprehensive guide will walk you through every step, ensuring you're well-prepared and confident throughout the journey.
Step-by-Step Application Process
Check Your Eligibility & DSR
Calculate your Debt Service Ratio (DSR). Bank Negara Malaysia allows maximum 70% DSR. Formula: (Monthly Commitments ÷ Monthly Income) × 100. Use our DSR calculator to check if you qualify.
Check CCRIS & CTOS
Obtain your credit report from Bank Negara Malaysia (CCRIS) for free. Check for errors and outstanding debts. A clean credit history improves approval chances significantly.
Prepare Down Payment (10-20%)
Most banks require 10% down payment (90% loan). Some may require 20% for certain properties. You can use EPF Account 2 for down payment if you're a first-time buyer.
Get Property Valued
Banks will arrange for property valuation. The loan amount is based on the lower of purchase price or valuation. Valuation typically costs RM 300-1,000 depending on property value.
Submit Loan Application
Submit complete documents to avoid delays. Incomplete applications take longer. Most banks provide decision within 2-4 weeks. Some offer instant approval for qualified applicants.
Await Approval & Sign Agreement
Once approved, you'll receive Letter of Offer. Review terms carefully before signing. Pay attention to interest rate, tenure, lock-in period, and penalty clauses.
Required Documents Checklist
Having all required documents ready speeds up the approval process. Here's a comprehensive checklist:
Personal Documents
- IC (Identity Card) copy
- Latest 3 months salary slips
- Latest 6 months bank statements
- EPF statement (latest)
- EA/EC form (if employed)
Property Documents
- Sale & Purchase Agreement (SPA)
- Property valuation report
- Title deed / Grant copy
- Booking receipt
- Developer license (for new property)
For Self-Employed
- Business registration (SSM)
- Latest 2 years income tax returns
- Latest 6-12 months business bank statements
- Company financial statements
- Audited accounts (if applicable)
Additional Costs to Budget For
Besides the down payment, budget for these additional costs when buying your first home:
| Cost Item | Amount | Details |
|---|---|---|
| Stamp Duty (MOT) | 1-4% of property value | Varies by property price tier |
| Legal Fees (SPA) | ~0.7% of property value | For sale agreement preparation |
| Legal Fees (Loan Agreement) | ~0.5% of loan amount | For loan documentation |
| Valuation Fee | RM 300 - 1,000 | Depends on property value |
| Disbursement Fees | RM 200 - 500 | Various administrative costs |
Common Mistakes to Avoid
Not checking DSR beforehand
✓ Use online DSR calculator before applying
Incomplete documentation
✓ Prepare all documents in advance
Not comparing bank rates
✓ Compare at least 3-5 banks for best rates
Ignoring total costs
✓ Budget for legal fees, stamp duty, valuation fees
Maxing out loan amount
✓ Borrow only what you can comfortably repay
Expert Tips for Success
- Start early: Begin preparing documents 3-6 months before you plan to buy. This gives you time to fix any credit issues.
- Improve credit score: Pay off outstanding debts, clear credit card balances, and avoid new loan applications before applying.
- Compare banks: Interest rates can vary by 0.5-1%. This difference can save you tens of thousands over the loan period.
- Consider fixed rate: Lock in rates for first 3-5 years for payment stability and protection against rate increases.
Conclusion
Getting your first home loan doesn't have to be stressful. With proper preparation, complete documentation, and understanding of the process, you can navigate the application smoothly. Remember to check your DSR, compare rates from multiple banks, and budget for all associated costs. Take your time, ask questions, and make informed decisions.