Home Loan Calculator: Steps to calculate your home loan.

Congratulations to you who are planning to own your own home! This decision requires careful planning, and we understand that you may have already gathered various information about the home-buying process.

Calculating Your Home Loan

Now, let's discuss how to calculate your home loan, especially for government and private housing loans. This is important so that you can assess your eligibility to own your dream home, whether it's a subsale (secondhand) house or a unit that is still under construction (new house).

1) Calculate Monthly Payments

For example, suppose you want to buy your first home at a price of RM400,000 for a period of 360 months or 30 years. What is the monthly payment you need to bear? With an estimated interest rate for a home loan of 2.88%, the gross monthly payment is around RM1,660.

List of Bank Interest Rates

2) Other Debt Commitments

Do you have other debts such as personal loans, car loans, or credit card balances? The total amount of your monthly commitments will affect your ability to get a housing loan.

• Estimated housing loan payment: RM1660 per month (applied for)
• Personal loan payment: RM200 per month
• Car loan payment: RM500
• Credit card debt balance: RM10,000 (5 percent will be considered as a monthly commitment, i.e., RM500 per month)
• Total monthly commitments: RM2860

3) Monthly Income

What is your monthly income? For example, RM6,500 per month.

4) Debt Service Ratio (DSR)

Use the Malaysian Debt Service Ratio (DSR) formula, which is the total monthly commitments divided by monthly income, then multiplied by 100 percent. With an estimated DSR of not more than 50%, the chances of getting a first home loan are quite bright.

Using the Malaysian Debt Service Ratio (DSR) formula based on the guidelines of the Malaysian central bank that banks use to determine whether you are eligible to buy the RM400,000 house or not. Here's how to calculate your DSR:

Monthly commitments to the bank ÷ your monthly income then x 100%.
RM2,860 ÷ RM6,500 x 100% = 44%

This helps you determine the eligibility for a private housing loan based on your salary before you submit an application.

5) High Income, High DSR

The higher your income, the higher the DSR that can be achieved if your commitments remain the same. If your income remains stable and you don't add more commitments, your chances of getting a home loan approval will increase.

6) Further Guidance

For more information, the article below will guide you step-by-step on how to use the house loan calculator to calculate your monthly payments.

Financial Planning with Our Housing Loan Calculator Malaysia

Remember, it's important not only to focus on owning a home but also to ensure your financial eligibility. We hope this guide helps you plan your home purchase wisely!