This year has been a tumultuous year for the property market in Malaysia. With cooling measure after cooling measure being implemented, property investors are putting a halt to their property buying and genuine property buyers are still finding it hard to afford a property in their desired location.
With the impending Goods and Services Tax (GST) set to be implemented next year, the remaining few who are brave enough to still delve into the cooling property market, are scrambling to buy a piece of property before April 2015.
Experts predict that the margin of increase will be about 3% for residential properties following the implementation of GST.
We’ve gone through all the home loan packages offered in 2014 and selected these crème de la crème of mortgages in Malaysia:
Best home loan for first time home buyer
If you are a first time home buyer who has struggled to save enough for the down payment and various other costs that are involved in purchasing a property, this is just the right home loan for you. Some of the highlights are the low interest rate and zero entry cost.
Loan amount: RM500,000 and above
Interest rate: 4.40%
Zero entry cost: Legal fees, stamp duty and valuation fee waived
Margin of finance: Up to 90% + 5% for MRTA financing
Lock-in period: 3 years
Why it’s the winner:
The RHB Islamic Home Loan is the true victor of this category because it truly understands the pain of first time home buyer. After painstakingly saving up for the down payment, most first time buyers do not have much left for other costs that may spring up during the home buying process. With the zero entry cost, buyer can easily save up to RM7,500 for a RM500,000 loan!
The 5% loan for MRTA also means less upfront cash from the buyer, and this will protect the owner’s dependents from the loan in the event something unfortunate happens to the owner.
Drawback:
This home loan comes with a three-year lock-in period. However, if you are buying your first property for your own occupation, this should not affect you. Lock-in period should only affect property owners who are looking to sell or refinance within the period. The low interest rate of 4.40% is only available for a loan amount of RM500,000 and above.
Best home loan for property investors
The first thing property investors look at when it comes to home loan is the interest rate (the lower the better), low to no lock-in period and also the services rendered by the bank. This package offers the best rate with no lock-in period if the investor decides to sell the property when the price is right.
Loan amount: RM500,000 and above
Interest rate: 4.40%
Margin of finance: Up to 90%
Lock-in period: None
Why it’s the winner:
The best thing about this home loan is the low interest rate despite not having a lock-in period. This is a dream come true for property investors, as they get to save on interest, and also they won’t be penalised if they decide to flip the property within the first few years. Though they have to contend with the Real Property Gains Tax (RPGT) if they sell within the first five years.
Drawback:
To enjoy the low interest rate, the loan amount applied for must be RM500,000 and above.
Best fixed rate home loan
Hate surprises that comes with variable home loan? A fixed rate mortgage is just the right option for you. After the recent hike in the Base Lending Rate (BLR), a fixed rate home loan is seen as a good bet to ride out the fluctuation of interest rates. Remember, your home loan is a long-term commitment!
Interest rate: 4.39%
Margin of finance: Up to 90%
Lock-in period: 5 years
Why it’s the winner:
Fixed at 4.39%, the AIA Home Loan offers the lowest interest rate for home loan at the moment. Enjoy fixed repayment for the entire tenure of your loan despite BLR changes.
Drawback:
AIA Home Loan offers up to 90% margin of finance, which also includes MRTA from AIA. MRTA is compulsory for this home loan. This means higher than 10% down payment from you.
Best refinancing home loan
Most people view mortgage refinancing negatively. However, it doesn’t have to be that way. If done correctly for the right reason, it can be a smart financial move that can save you some money! First thing first, will refinancing cost you more money?
Loan amount: From RM300,000 to RM750,000
Interest rate: 4.60% to 4.40%
Margin of finance: Up to 90%
Lock-in period: 5 years
Moving cost: None
Why it’s the winner:
The best part of this home loan package is the zero moving cost offer, which means you can save a few thousand bucks on legal fees, valuation fees, stamp duty and other disbursement or charges that may incur in the preparation of the legal documentation for the loan. This refinancing promotion is valid until until December 31, 2014. This applies for home loan value between RM300,000 to below RM750,000.
Drawback:
The interest rate can be slightly higher than other home loans. However, if you are short on cash, this can be a good option to consider.
Best home loan for high-end properties
Shopping for a family home that cost more than RM1 mil? The good news is, you will find home loan packages that offer lower interest rate than the usual RM500,000 loan. Here’s the lowest in the market and with no lock-in period too!
Interest rate: 4.20%
Margin of finance: Up to 90%
Entry cost: Legal fees, stamp duty and valuation fees waived
Lock-in period: None
Why it’s the winner:
Buying a property that will result in at least RM1 mil in mortgage is no joke, which is why you need to consider all aspects before signing on the dotted line. The low interest rate offered by Al-Rajhi Bank Home Loan has made it the best home loan for such properties. To make the deal sweeter, you can save some cash as the legal fees, stamp duty and valuation fees will be borne by the bank.
Drawback:
This is a conventional home loan, and there is no flexi packages available. Hence, if you are thinking to save some money on interest whenever you have extra cash, this is probably not the best package for you. However, if you foresee yourself paying the same repayment every month, then go for it.
A home loan is a long-term commitment and it pays to do your home work before you decide on one. Though you can refinance your home loan for a better rate years later, you also need to consider the lock-in period (if any) and the moving cost that may be involved.
Though the property market in Malaysia is self-correcting due to the various cooling measures introduced by the Government, the home loan market is still competitive. The recent hike in BLR may have halted some buyers, but as GST looms ahead, the serious buyers and investors are moving quickly to lock in the properties they want.
As iMoney helps thousands of people realise their home buying dream, we have gone through pages and pages of fine prints, and negotiations with different banks, we have identified the best home loans in Malaysia to suit your needs, as highlighted above.
Finding the right home loan means extra savings and owning your dream home faster. May 2015 brings more exciting home loan packages for aspiring home buyers!
