There are generally two ways for foreigners to finance the purchase of properties in Malaysia.
The first way is to bring in your own money from your home country to finance the purchase. This is the most direct approach and the easiest, as non-Malaysians are allowed to maintain accounts with banks in Malaysia without restriction on the amount of Ringgit held in the accounts.
The second is to take a loan with a bank in Malaysia. With sound credit ratings, most foreigners should have no problem obtaining Margin of Financing of 70% with banks in Malaysia. This could be even higher depending on the banks and financial standings of the applicants. For those seeking to purchase a residential property in Malaysia by taking up a home loan, you are advised to use an online comparison tool with the various banks as they may differ slightly from bank to bank.
Some banks such as CIMB and UOB offer categories of home loans specifically catered for foreigners; which make them a great place to start when shopping around for a home loan. But generally, most banks in Malaysia are eager to provide home loans for foreigners so finding one should be relatively simple.
The average interest rate of mortgage loans here is currently between 4% and 5%.
The Application Process:
The process of applying for a personal loan is relatively similar to how a Malaysian citizen or permanent resident would apply for one, with the exception of certain document requests made to foreigners. For instance, most banks would require a working permit, visa (with at least one year remaining before expiration) or employment contract from foreign personal loan applicants. Apart from these, however, the criteria for both locals and foreigners remain the same.
Normally, the following steps are included when applying for a local property loan in Malaysia:
a. Contact a handful of banks and see if they currently offer loans to non-resident foreigners. If you have a work or residence permit in Malaysia, the chances will increase significantly.
b. Be prepared to visit the bank in person, for them to make a personal evaluation. You’ll need to prepare a number of documents before the meeting, for example, employment letter, passport, bank statements and more (see above).
c. Get pre-approved home loan applications, also referred to as In-Principle-Approvals, which will guarantee the maximum loan amounts from banks. It’s important to secure your financing, before making an offer on a property.
Here’s a list of the usual income requirements and documentation for foreigners do note that it may vary so always check the fine prints:
For expats who are employees in Malaysia:
- Identification Card – NRIC (copy)
- Working Permit (if any) / PR card with validity for more than 6 months
- Property Booking Receipt
- Sales & Purchase Agreement/Title (copy)
- Latest 3 months pay slip
- Latest 3 months personal bank statement (to show salary credited as per pay slip)
- Employment Letter / Latest KWSP statement
- Latest income tax declaration form with payment receipt acknowledgment
- Deposit statement e.g Fixed Deposit, ASB or Bonds (if any)
For expats who are self-employed in Malaysia:
- Identification Card – NRIC (copy)
- Working Permit (if any) / PR card with validity more than 6 months
- Property Booking Receipt
- Sales & Purchase Agreement/Title (copy)
- Latest 6 months Company bank statement
- Latest 6 months Personal bank statement
- Deposit Statement e.g Fixed Deposit, ASB or Bonds (if any)
- Latest income tax declaration form with payment receipt acknowledgement (preferably 2 years)
- Business Registration (to show ownership of the company)
- Latest Profit & Loss statement
- Memorandum of Article and Company Profile
- Form 24, 49
