The short answer
The downpayment is the part of the price you pay from your own money: price − loan = downpayment.
- With a 90% loan, it is 10% of the price.
- If the bank lends less, it is more. Bank Negara Malaysia caps an individual's third and later housing loans at 70%, so the downpayment on that purchase is at least 30%.
- The booking fee usually counts towards it.
On a generic RM 500,000 home with a 90% loan, the downpayment is RM 50,000, and stamp duty and legal fees come on top. Try your own figures in the loan calculator. Want me to work it out for your own case? WhatsApp +60 17-279 8932.
What the downpayment is, in plain words
Banks do not lend the full price. The share they lend is the margin of finance; the share they do not lend is yours to pay. That share is the downpayment.
| Margin of finance | Downpayment |
|---|---|
| 90% | 10% |
| 80% | 20% |
| 70% | 30% |
The margin can be lower than you expect for reasons that have nothing to do with the price: your income and debts, the bank's valuation of the property, or how many housing loans you already have. The margin of finance guide covers these in detail.
Booking fee, earnest deposit and downpayment
These three words are often mixed up.
| Term | When | What it is |
|---|---|---|
| Booking fee | When you reserve a unit in a new project | A sum to hold the unit before the SPA; usually deducted from the first payment |
| Earnest deposit | When you make an offer on a subsale home | A sum paid with the signed offer, often part of the total downpayment |
| Downpayment | Over the purchase | The full share of the price that the loan does not cover |
Before you pay a booking fee, read the booking form for what happens if you do not go ahead, and whether any part is refundable if the loan is not approved.
When the money is due
New projects under construction
For a home sold under the Housing Development Act, the National Housing Department states that the first payment is 10% of the price, paid on the date the SPA is signed. A developer cannot collect money without a signed SPA.
After that, the developer bills in stages as building work is certified, and the bank releases its loan stage by stage. You pay interest only on what has been released. The progressive payment guide walks through it.
So with a 90% loan, the 10% at SPA signing is your downpayment, minus any booking fee already paid.
Subsale (resale) homes
On a subsale home, the timing is agreed between buyer and seller. A common pattern:
- Earnest deposit with the signed offer.
- The balance of the downpayment when the SPA is signed, often making up 10% in total.
- The bank pays the balance at completion.
Because there is no construction stage, you also pay the full transfer stamp duty and legal fees at the start, so a subsale purchase needs more cash up front.
Larger downpayments
If your margin is 80% or 70%, the extra amount is still yours to pay. On a new project, the bank may ask you to pay your full share before it starts releasing the loan. Ask your bank how it handles this.
Worked example: a RM 500,000 home
These figures are a generic example on a round price, not a specific property.
90% loan (first or second housing loan)
| Item | Amount |
|---|---|
| Price | RM 500,000 |
| Loan (90%) | RM 450,000 |
| Downpayment (10%) | RM 50,000 |
70% loan (third housing loan)
| Item | Amount |
|---|---|
| Price | RM 500,000 |
| Loan (70%) | RM 350,000 |
| Downpayment (30%) | RM 150,000 |
The same home needs three times the downpayment on a third loan. If you already own two homes with loans, plan for this before you book.
The cash you need beside the downpayment
| Cost | Generic figure on a RM 500,000 home | Notes |
|---|---|---|
| Transfer (MOT) stamp duty | RM 9,000 before any exemption | Malaysians: 1% on the first RM 100,000, 2% up to RM 500,000 |
| Loan agreement stamp duty | 0.5% of your loan: RM 2,250 on RM 450,000 | |
| Legal fee, SPA | RM 6,250 before 8% service tax | Solicitors' Remuneration Order 2023 scale |
| Legal fee, loan | RM 5,625 on RM 450,000 before 8% service tax | Same scale |
| Disbursements, valuation, moving in | Varies | Ask your lawyer and bank for quotes |
Exemptions and developer arrangements can change these. The stamp duty guide and the legal fees guide explain each line.
Ways to prepare the downpayment
- Savings. Keep the money in an account you can reach quickly; the SPA date comes fast after booking.
- EPF. Members may be able to withdraw from their EPF account to buy or build a house, subject to EPF's conditions. Check the current rules and documents on the EPF website before you count on it.
- A joint purchase. Two buyers can share the downpayment, and both incomes count for the loan.
- A cheaper home or a smaller loan. Often the simplest fix.
Avoid borrowing the downpayment on a personal loan. The new instalment counts in your DSR and can stop the home loan from passing. The DSR guide shows why.
Common mistakes
- Planning on a 90% loan without checking the bank's valuation and your DSR first.
- Forgetting the third-loan cap of 70%.
- Paying a booking fee before knowing the refund terms.
- Counting only the downpayment and running short on stamp duty and legal fees.
- Taking a personal loan for the downpayment.
Check before you sign
This page explains how the downpayment works in general. It is not financial advice. Before you pay a booking fee, ask the bank for an indication of your loan and margin, and ask the lawyer for a quote of fees and stamp duty. For help with a specific property, WhatsApp Shyan Yee (REN 46305, IQI Realty) at +60 17-279 8932.
Frequently Asked Questions
How much is the downpayment for a house in Malaysia?
It is the price minus the loan. With a 90% loan, the downpayment is 10% of the price. If the bank lends less, for example because of your income or because it is your third housing loan, the downpayment is larger.
Does the booking fee count towards the downpayment?
Usually yes. The booking fee you pay when you reserve the unit is normally deducted from the first payment due when you sign the sale and purchase agreement. Check the booking form to confirm.
When do I pay the downpayment on a new project?
For a property sold under the Housing Development Act, the first payment of 10% of the price is due when the sale and purchase agreement is signed, according to the National Housing Department. The bank's loan then covers the later stages.
When do I pay it on a subsale home?
Commonly, the buyer pays an earnest deposit with the offer and the balance of the downpayment when signing the SPA, often adding up to 10%. The amounts and timing are agreed between buyer and seller, so they can differ.
Is the downpayment the only cash I need?
No. You also need stamp duty on the transfer and on the loan agreement, legal fees for both agreements, and often a valuation fee and moving-in costs. On a resale home these are paid largely in the first weeks.
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