A home for the majority of Malaysians is a big investment; which determine where they stay, where their children grow up and what kind of neighbours they have. Renting is a fantastic option for students or people who have jobs that require them to travel. However, in the long term you’re losing out on potential income and will face many uncertainties.
Eligibility and Budget
The initial step towards purchasing a home is knowing how much you can afford with your current income. A simple way to do this is to look online for an “Affordability Calculator” or visit your local bank branch. In Malaysia, there are numerous low-cost and affordable housing programme’s provided by the government, below are the main three:
|Housing programme||Household income eligibility (RM)||Approximate home cost (RM)|
|PPR (Program Perumahan Rakyat)||< 3,000||30,000 – 35,000|
|SPNB (Syarikat Perumahan Negara Berhad) / RMR1M (Rumah Mesra Rakyat 1 Malaysia)||< 3,000||35,000 – 250,000|
|PR1MA (Perumahan Rakyat 1 Malaysia)||2500 – 10,000||100,000 – 400,000|
For civil servants specifically, there is PPA1M (Perumahan Penjawat Awam 1 Malaysia) housing program. Houses such as the ones provided under the PR1MA Program are located in urban areas making them adjacent to places of work, amenities and places of interest. Houses within a good location such as being adjacent to public transport are generally in high demand and may end up as good financial investments in the future.
Saving Up and The Purchase
Bank typically finances 90% of your mortgage for the 1st and 2nd property, so the immediate target is to save up 10% from the property price. A good way to set aside money for a home deposit is set a 12-month goal for yourself. Place approximately 1/3rd of your income in your savings account each month, this is also the average of how much you will eventually pay for installments with the bank.
Occasionally, you might be lucky to find a housing developer that provides a “no money down” option where a 10% deposit is not required. In these circumstances, you only pay the monthly installment to the bank. Be on the lookout for other promotions such as bumiputra discounts, waiver of legal fees and stamp duty, etc as this may save you thousands of ringgit.
Taking the step from being a renter to a homeowner is not a short journey, but should be your goal regardless of income. It will change how you and your family experience daily life.
For government servant, you can apply online via Direct Lending platform for a co-operative loan (pinjaman koperasi) to help you to part finance the deposit that you require to buy your dream home.
Image copyright: dedivan1923 / 123RF Stock Photo