Clarification on commercial banks and home financing for first time buyers

November 16, 2015
Kuala Lumpur, Monday, 16 November 2015:- The Association of Banks in Malaysia (ABM) wishes to clarify a recent report on banks being ‘overly cautious’ on mortgage loans for first time home buyers.

“The business of our member banks is in the main lending or extending credit. There is no intention whatsoever to make lending more difficult, particularly for first time home buyers,” ABM says. First time home buyers who are eligible will continue to be able to obtain financing. What is important is for such buyers to recognize the need to make sound decisions of their own affordability appropriate to their financial circumstances.

For first time home buyers, the bank usually finances up to 90% of the price of the property. They may also want to consider applying for Government schemes such as “Skim Rumah Pertamaku” for assistance in their property purchase.

Special housing loan packages are being offered by commercial banks to suit the needs of first time home buyers. They are thus encouraged to shop around to find a financing package which best suits their needs. Additionally, applications for such mortgage loans are decided on a case to case basis and there is no blanket approval system.

Consumers are also encouraged to fully and accurately disclose all material information with regard to their financial position when applying for a home loan. In conducting affordability assessments, commercial banks take into account the applicant’s income after statutory deductions, expenditure on necessities and all existing debt obligations from banks and non-bank lenders. For self-employed applicants, banks will also take into account their proof of savings and regular income sources. First time home buyers should work with their financiers when making the suitability and affordability assessments for any facility applied for to pave the way for more robust financial management on the part of the buyers. Commercial banks are committed to playing their role in this process.

ABM and its Council banks would be pleased to engage with all State Governments with regard to matters related to home ownership in the state. Members of the public who may have enquiries or complaints related to housing loan matters are welcomed to contact us at our ABMConnect hotline by dialing 1-300-88-9980, or emailing us at eABMConnect by logging on to our website,

ABMConnect | Toll-free on 1300-88-9980

ABMConnect provides an avenue for consumers to clarify any doubts and verify information on conventional banking issues.