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Third home loan, Measures in Promoting a Stable and Sustainable Property Market and Sound Financial and Debt Management of Households

Bank Negara Malaysia wishes to announce with immediate effect the implementation of a maximum loan-to-value LTV ratio of 70% housing loan, which will be applicable to the ( 3rd house ) third house financing facility taken out by a borrower.  Financing facilities for purchase of the first and second homes are not affected and borrowers will continue to be able to obtain financing for these purchases at the present prevailing LTV level applied by individual banks based on their internal credit policies. The measure aims to support a stable and sustainable property market, and promote the continued affordability of homes for the general public. 

At the national level, residential property prices have increased steadily in tandem with economic development and the rise in income levels.  This aggregate growth trend remains largely manageable and has not deviated from the long term trend in residential property prices.  In the more recent period, however, specific locations, particularly in and around urban centres, have experienced faster growth, both in the number of transactions and in house prices. This is further supported by an increase in financing provided for multiple unit purchases by a single borrower, suggesting increasing investment activity that is of a speculative nature.

The targeted implementation of the LTV ratio is expected to moderate the excessive investment and speculative activity in the residential property market which has resulted in higher than average price increases in such locations. This has also led to increases in house prices in surrounding locations, thus contributing to the declining overall affordability of homes for genuine house buyers.  This measure therefore remains supportive of the objective of encouraging home ownership among Malaysians which continues to be an important national agenda. 

Introduction of the Financial Capability Programme

As part of the continuous efforts to raise the level of financial literacy and to promote  sound financial and debt management by Malaysians, Bank Negara Malaysia also wishes to announce the introduction of the Financial Capability Programme. This Programme will be offered by Agensi Kaunseling dan Pengurusan Kredit (AKPK) through its establishments nationwide and will commence from January 2011. The Programme is aimed at equipping individuals with important knowledge for responsible financial decisions by gaining practical understanding and skills in money and debt management. This in turn will contribute towards preserving the sound financial positions of households and ensure that debt accumulation is commensurate with household affordability, including their ability to absorb interest rate adjustments and potential volatility to income and expense levels. Individuals particularly new prospective borrowers and young adults are strongly encouraged to participate in this specially designed programme. The details of the implementation of the Financial Capability Programme will be announced later in December this year.

Bank Negara Malaysia
3rd November 2010

By | 2016-11-01T10:40:19+00:00 November 3rd, 2010|Latest Article/News|2 Comments


  1. Naresh November 8, 2010 at 2:03 pm


    Need to know the following with regards to the new ruling;

    1. What if a person has 5 homes but all paid for in full ie no loans. Will he be entitled to the 90% bracket if he takes a loan for the 6th house?

    2. What if a person is a joint owner in the S&P but the loan is taken by one person only. Can the other person be entitled to the 90% loan if he buys another house.

  2. Puvan February 17, 2011 at 12:10 pm

    Hi folks,

    I would like to ask…My first property is commercial property, with joint name with my mum. The second one is residential property. For third property, can i eligible for 90% financing since first one is commercial and not residential?


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