Home Loan Comparison Between Banks in Malaysia


If you plan to buy a house, you’ll most probably need a home loan.  However, getting a good home loan is actually pretty challenging.  You’ll need to determine the kind of loan you need, and you’ll have to find out the interest rates so you can make comparison.  Traditionally, that means visiting or calling up all the banks.

In Malaysia, there are generally two types of home loan – flexi, and non-flexi (or “conventional”).  Flexi loans give you the freedom to reduce your loan interest with additional income, whilst non-flexi loans are more rigid and have the same repayment instalment throughout the loan period.  Depending on what you need, you can opt for either.  Personally, I believe flexi loan to be more beneficial.

In 2013, Bank Negara introduced a new regulation, which limits home loan period in Malaysia to a maximum of 35 years. If you are planning to purchase a more expensive home by stretching your loan period to 45 years or beyond, you should take note that you can’t do that now.

These days, home loan rates can differ greatly from bank to bank. For a typical flexi home loan of RM500,000, rates can be anything from BLR – 2.4% to BLR – 2.2%, which translates to a difference of tens of thousands in Ringgit value.  As such, comparison is a must if you want to get a home loan that benefits your wallet the most.

For your comparison purpose, the table below contains some of the home loan packages with the most competitive rates in Malaysia (as at September 2013).  The lowest interest rates shown are dependent on the loan amounts. Generally, the higher the loan amount, the better the rate is.

Do take note that the packages may change, so you’re advised to confirm with the banks / financial institutions to ascertain the prevailing rates and details.

Entity Product Name Type Lowest Interest Rate Details
AIA AIA Home Loan Fixed Rate 4.2%
  • Margin of financing up to 90%
  • Must be adequately protected by AIA MRTA or AIA Life policies
  • 5 –year lock-in period
Standard Chartered Bank Mortgage One Full-flexi 4.1%
  • Uses one single account that consolidates all banking deposits to reduce loan interest
  • Interest calculated daily for greater savings
  • “Payment holiday” allows borrowers to skip instalment for one month
  • No lock-in period
Mortgage KLIBOR Pegged to KLIBOR
  • Home loan with interest rate pegged to KLIBOR (Kuala Lumpur Inter-Bank Offered Rates)
  • Potential of lower interest rate (i.e. KLIBOR is consistently lower than BLR)
  • Allows for payment in excess of instalment amount
  • No lock-in period
Conventional Housing Loan Conventional
  • Term loan with fixed monthly instalment
  • Loan eligibility of up to 40% of salary
  • Margin of financing up to 90%
  • No lock-in period
Standard Chartered Saadiq My Home-i Conventional 4.1%
  • Islamic home financing package based on concept of Diminishing Musharakah
  • Stamp duty waived when refinancing from conventional loan
  • Ceiling rate protection guards borrowers from BLR fluctuations
  • No lock-in period
Ambank Home Loan Conventional 4.15%
  • A combination of term loan and overdraft is available
  • Allows for payment in excess of instalment amount to reduce interest
  • 5 –year lock-in period
Home Link Full-flexi
  • Flexi home loan linked to current account
  • Funds in linked account will reduce interest and shorten loan period
  • 5 –year lock-in period
Ambank Islamic Home Financing-i Conventional 4.15%
  • Fixed rate Islamic home financing package
  • Legal fees and stamp duty exempted for completed properties including refinancing
  • Low interest rate for the first year
  • 5 –year lock-in period
Flexi Home Financing-i Full-flexi
  • Variable rate Islamic home financing package
  • Margin of financing up to 95%
  • Rebate for early settlement
  • 5 –year lock-in period


1 comment… add one
  • If I am having a flexi loan account and getting rental income

    is my income that I have to declare to income tax My rental income for 12 months minus interest paid in the flexiloan account during the year (including interest saved by deposit) – maintainence charges, – quit rent- charges to maintain the flat eg marble polish , fire insurance and council assessment

    John George


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