FIRST-TIME BUYER
Written by Fazrina Fezili
Buying your first property is a major financial decision. Whether you're planning to buy a condo in the city or a terrace home in the suburbs, understanding the actual cost — and how much income you need — is the first step.
In this guide, we’ll break down what it takes to afford a RM500,000 home in Malaysia. From income requirements to monthly payments and upfront costs, here's what you need to know before making that big commitment.
Let’s assume a typical housing loan scenario:
With this setup, your estimated monthly mortgage payment is about RM1,992, which we will round to RM2,000 for simplicity.
This monthly amount is the starting point. But whether or not a bank approves your loan depends heavily on your Debt Service Ratio (DSR).
DSR stands for Debt Service Ratio. It’s a key formula used by banks to decide if you can afford a housing loan.
DSR = (Total Monthly Debt Payments ÷ Net Monthly Income)
Banks typically prefer your DSR to be within 30% to 40%, although some may allow more flexibility for first-time buyers.
This means that all your debt obligations including the new home loan, car loan, PTPTN, and credit card repayments — should not take up more than 30–40% of your monthly income (after tax and EPF deductions).
Let’s assume you have no other loans. You’ll need to earn enough so that your RM2,000 monthly home loan repayment stays within a safe DSR limit.
DSR Limit | Monthly Income Required (Net) | Estimated Gross Salary |
30% | RM6,667 | RM8,000 – RM8,500 |
35% | RM5,715 | RM7,000 – RM7,500 |
40% | RM5,000 | RM6,000 – RM6,500 |
If you’re applying alone, you’ll need to show the bank that your income can comfortably support the RM2,000 monthly repayment.
If your income is below RM5,000, your application might be rejected unless you apply jointly or put down a larger down payment.
Applying with a partner significantly improves your chances.
Let’s say two people each earn RM3,500 net (RM7,000 total). The RM2,000 monthly repayment is only about 29% of your joint income — well within safe limits.
Even if both partners earn RM3,000 each (RM6,000 combined), the DSR would be around 33%, which is still manageable.
Many first-time buyers focus only on the down payment, but buying property involves several other upfront costs. Here’s what to expect:
However: First-time home buyers may qualify for full exemptions under government schemes for properties priced up to RM500,000.
You should aim to save at least RM60,000 – RM70,000 upfront to cover the down payment and other charges, plus set aside 6 to 12 months of emergency funds.
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To afford a RM500,000 home in Malaysia, you need a net monthly income between RM5,000 and RM7,000, depending on your debt obligations. You’ll also need around RM60,000 upfront for the down payment and other fees. With the right financial planning, a RM500,000 property is achievable for many Malaysians.
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