Malaysian loan interest rates are currently at a record low and this might continue as Malaysia’s central bank intends to refrain from raising interest rates in order to boost growth.
Generally only foreigners who are in Malaysia on a work visa or under ‘Malaysia My Second Home Programme’ are eligible to apply for a loan or mortgage. The loan usually covers up to 80% of the purchase price.
Some banks, however, also offer loans to foreigners without a visa. Yet the amount of loan will usually be lower and banks offering these loans will be less easier to find.
It is indeed recommended to apply for a loan/mortgage at a local or national Malaysian bank. It might be easier to obtain a credit, as Non-Malaysian banks might be still suspicious about the investment risk, whereas Malaysian banks are currently making an enormous effort to attract foreign investors.
Applying for mortgages
Shop around and get an overview of the offers before you decide to take out a loan at a certain bank.
As Malaysia is a Muslim country, opt for foreign or other local banks instead of Islamic banks, as the Islamic law forbids interest transactions. In addition to various national banks all larger foreign banks like HSBC, Bank of America or Deutsche Bank are represented in Malaysia.
In order to apply for loan, most banks will ask for the following documents:
- ID card or passport
- Last 3 months’ salary slip or latest bank statements
- Latest income tax return (if available)
- Sale contract of property or letter of offer
- Photocopy of the land title (if available)
Additional documents to support credit worthiness might be required.