What's the Minimum Salary for a Home Loan in Malaysia?

Dreaming of owning your first home in Malaysia? You're certainly not alone! It's a dream that many share, and as the Malaysian property market continues to grow, more and more individuals are eager to make their homeownership dreams come true. However, one of the most common questions that potential homeowners have is, "What's the minimum salary needed to secure a home loan in Malaysia?"

The answer to this question isn't as straightforward as a single number. In fact, several factors come into play when determining how much a bank or financial institution is willing to lend to you. Whether you’re a first-time homebuyer or looking to invest in property, it’s essential to understand how banks evaluate your eligibility for a home loan.

What Banks Really Look At for a Home Loan in Malaysia?

1. Your Debt Service Ratio (DSR)

This is super important! Your DSR shows how much of your monthly income goes to paying off debts. It includes your car loan, personal loan, credit card bills, PTPTN, and the new mortgage payment.

Formula: (Your total monthly debt payments ÷ Your net monthly income) x 100%

How DSR is Calculated

Banks calculate your DSR by dividing your total monthly debt payments by your gross monthly income. For example, if your monthly income is RM5,000 and your monthly debt payments (like car loans and personal loans) total RM2,000, your DSR would be 40%.

• Acceptable DSR: Banks generally prefer your DSR to be below 40%. If your DSR is too high, it might suggest you're already stretched with debt and might struggle to repay the mortgage.
• Impact of DSR on Loan Approval: A lower DSR means you're more likely to be approved for a home loan, as it shows you have enough income to manage the new loan without over-stretching your finances.

2. Your Income (Gross vs. Net)

Banks look at your gross monthly income (your full salary before anything is taken out). But what really matters is your net monthly income – the money you actually receive after deductions like EPF, SOCSO, and taxes. This shows your true ability to repay the loan.

3. Property Price and Loan Amount

Naturally, a more expensive property means you need a bigger loan and higher monthly payments. For most first-time homebuyers, banks usually lend up to 90% of the property value. This means you need to have a 10% down payment ready.

However, keep an eye out for special government programs like:

• Skim Jaminan Kredit Perumahan (SJKP) 2024/2025: This scheme helps people with irregular income (like gig workers or small business owners) get loans. It can offer financing up to 110% of the property value (for properties up to RM500,000), covering the loan, insurance, and legal fees.
• SJKP MADANI 2024/2025: This is similar to SJKP but offers even more, up to 120% financing for properties up to RM360,000. It can also cover renovation and furniture costs! For both SJKP and SJKP MADANI, the maximum monthly income for eligibility is RM11,000. These schemes are designed to boost first home ownership for those who might not have a steady payslip.

4. Loan Period (Tenure) and Age

Banks will also consider your age when you apply for a loan because it affects how long you’ll need to repay the loan.

What banks check:

• Your Age: Banks usually require that the loan is repaid by the time you’re 70 years old. So, if you’re younger, you can take a longer loan term. If you're older, the loan term might be shorter.
• Loan Duration: The bank will look at your age and decide the maximum loan period you can take. For example, if you’re 35 years old, you might be able to get a 35-year loan.

5. Your Credit Score (CCRIS/CTOS)

Your credit score tells the bank how well you've managed money in the past. A good credit score shows that you are responsible with your finances and can be trusted to repay the loan.

What banks check:

• Your Credit Score: In Malaysia, a score above 700 is usually good enough for home loan approval. If your score is low, you may need to improve it before applying for a loan.
• Credit History: Banks look at your past behavior with money, like if you've missed payments or had any problems with debts. A clean credit history increases your chances of getting approved.

6. Job Stability

Banks need to make sure that you can afford to repay the loan each month. That’s why they pay close attention to your income and job situation.

• Your Salary: The higher your income, the more likely you are to be approved for a loan. But banks also look at whether your income is enough to cover your other expenses and the loan repayment.
• Your Job: Banks like to see that you have a stable job, especially if you've been working in the same company for a while. This shows that you have a reliable source of income.

What is the Minimum Salary for a Home Loan in Malaysia?

The minimum salary needed for a home loan depends on the type of property you want to buy. Here are some general guidelines:

For Properties Below RM 300,000

If you’re looking to buy a property worth less than RM 300,000, you typically need to earn at least RM 3,000 to RM 5,000 per month. With this salary, you should be able to afford the monthly payments, provided you don’t have too many existing debts.

For Properties Over RM 500,000

For more expensive homes, especially those over RM 500,000, you will likely need a monthly income of RM 6,000 to RM 10,000 or more. This ensures that your monthly repayments are manageable and within the debt-to-income ratio that banks prefer.

Disclaimer: These are just rough estimates for property affordability in 2025. Your actual loan approval depends on your full financial picture and the bank's rules.

Tips to Boost Your Home Loan Approval Chances

Want to improve your odds of getting that mortgage approval? PropertyGenie.com.my has a great guide on "9 Tips on How to Increase Your First Home Loan Approval in Malaysia". Here are some quick takeaways:

• Pay Off Your Debts: This lowers your DSR and makes you look less risky.
• Improve Your Credit Score: Always pay your bills on time!
• Save More for Down Payment: A bigger down payment means you borrow less, which is always good.
• Show Stable Income: Try to keep your job consistent.
• Prepare Your Documents: Have your payslips, bank statements, and EPF statements ready.

Don't let the idea of a "minimum salary" stop you from exploring home ownership. Focus on managing your finances well. At propertygenie.com.my, we're here to help you every step of the way. Use our easy home loan calculator, explore houses for sale, and read our expert guides. Your dream Malaysian property could be closer than you think!

Other Article:

• MRTA vs MLTA vs MRTT vs MLTT: Which Is The Best For You?
• Stamp Duty Exemption for First-Time Homebuyers until 2025
• What Are the Current Housing Loan Interest Rates in Malaysia?