Use our calculator for a more precise estimate!

Don’t spend more than a third (⅓) of your net income on housing expenses, including loan repayments, utility bills, property taxes and maintenance costs.

Here’s how to calculate the monthly repayment you can afford for a bank loan.

1. Firstly, start by determining your net monthly income (that’s your income after taking away taxes, EPF, and PERKESO/SOCSO deductions).

2. If you can, minus 10% of your net income as your savings for a rainy day.

3. Now minus all the usual stuff you spend money on every month including your car/personal loan repayments, credit card interest, utility bills including Indah water, food, petrol and toll costs, education fees, other incidental expenses etc.

4. Then you’ll need to take-away the insurance, tax, and other expenses you’re expecting to pay for your new house. It’s a good idea to set aside at least  RM200 for an apartment and RM300 for a house each month.

• • Home insurance (which usually covers fire, theft, damage and contents depending on the policy). Budget about RM150 if it’s an apartment or RM1000 for a house per year.

• • Maintenance fees and sinking fund (for apartments and condominiums) of RM150 to RM300 per month.

• • Quit rent (which is charged by the square foot, depending on the area). For example, a 1000 sq ft home in KL would be charged RM350 per year. For an apartment, the amount would be negligible since the same land is shared with hundreds of other units.

• • Assessment tax (which is by the local authority). This tax is about 4% of the annual rental value of the property (remember, it’s the rental value, not property value). Budget about RM500-1000 for this per year.

• • Unexpected Repairs. You never know when a pipe might burst or other repairs need to be carried out, so be sure to set aside some money for this possibility. If major repairs need to be carried out at an apartment complex, costs will usually be shared among all residents.

5. Now take a look at the balance you have left. This amount is the monthly repayment that you can afford for a bank loan!

To help you out, we’ve come up with affordable housing price ranges depending on the spare cash you have at the end of the month (taking away all your expenses). You can use this table to judge the value of the home you can afford:

Source: Creador analysis

Note that we made the following assumptions:

• 25 year loan tenure
• 4% fixed interest rates
• the loan amount is 90% of the home value
• an additional 5% of the loan value is added to the loan for the mortgage insurance

Finally, shop around for the best housing loans! Don’t just go to one bank – visit different banks and take note of the interest rate and the bank fee charges. It can make a huge difference to how much you’ll end up paying!

If you already know how much the home you want costs, you can use our monthly repayment calculator to see what your monthly repayments might look like.