How Much Home Loan Can You Get Based On Your Salary?

We're going to explore average incomes in Malaysia to understand how affordability looks across the country, because like it or not, your income directly impacts the amount of your mortgage loan.
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Money, money, money! It makes the world go round is what they say, and it certainly has a big role to play in property. How much money you earn is pretty important when it comes to buying a home.

The simple and unavoidable reality is that your income directly impacts the amount of your mortgage loan. If you want to buy property in Malaysia, you’ll need to work out how much you can be approved for.

Top tip to start – a good rule of thumb is that banks will loan you up to 30% of your gross income annually.

If you’re a KL power couple earning millions of Ringgit every year, then you might be considering a home loan to purchase the luxurious apartment in The Troika in KLCC.

If you’re someone with a more standard income and are looking to retire in the tranquility of nature, then it could be you’re looking for a beautiful terrace home in Kelantan

There are plenty of properties for sale on PropertyGuru today. But what you can afford is heavily based on your earnings, and the mortgage loan agreement offered to you by a bank.

It’s time to look at average incomes, and home loan affordability in Malaysia.

 

A question of incomes and home loans

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First up, it’s good to know that your income isn’t the only factor that impacts your home loan offer. There are a number of other reasons why home loans are rejected.

Financial considerations are of course at the heart of this. It’s not just what you earn for example, but what your spending habits are like (and your outstanding debts) that affect your credit score.

The Debt Service Ratio (DSR) is a really important part of that. That’s basically how banks decide if you can afford to pay each month for your home loan in Malaysia.

General economic conditions also play a part. If there's a period of national or global economic hardship, banks tend to be more cautious in their investments… and ultimately, providing home loans is a bank directly investing in you.

Above all, remember to always do your research and understand the pitfalls before you apply!

 

Average income and home loan affordability

With all those considerations in mind, we need to explore average incomes in Malaysia to understand how affordability looks across the country.

Luckily, the Government and the Malaysian Department of Statistics do a good job of compiling that information.

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It's common knowledge that there's a gap between average incomes for Malaysians who live in rural settings, compared to those who live in urban areas.

As such, we’ve put together a list of mean and median incomes across the two settings, as below:

Malaysian Total Income (2018)

Monthly Mean

Monthly Median

RM2,308

RM3,087

Annual Mean

Annual Median

RM27,696

RM37,044

*Editor's note: As at time of writing, the 2018 Salaries & Wages Survey Report from the Department of Statistics Malaysia (DOSM) is the latest version released thus far.

Rural Income (2018)

Monthly Mean

Monthly Median

RM1,481

RM2,083

Annual Mean

Annual Median

RM17,772

RM24,996

*The term 'rural' is defined by the Department of Town and Rural Planning as areas where the lands are mostly used for agriculture or are forested.

Urban Income (2018)

Monthly Mean

Monthly Median

RM2,415

RM3,274

Annual Mean

Annual Median

RM28,980

RM39,288

*The term 'urban' is defined by the DOSM as areas where 60% of the population (aged 15 and older) are involved in non-agricultural activities.

With this information in hand, we can use the mathematical magic of PropertyGuru’s home loan calculator to work out affordability and maximum loan amounts for a range of income bands.

Loan Calculation Assumptions

Term

35 years

Interest rate

4%

% of income spent on loan

50

Monthly debt obligations

RM200

 

Maximum Loan Value

Single/Household
Annual Income (RM)

Maximum Loan (RM)

Monthly Payment (RM)

17,500

86,500

383

25,000

142,962

633

30,000

180,679

800

35,000

218,395

967

40,000

255,886

1,1,33

50,000

331,320

1,467

100,000

 707,583

 3,133

200,000

1,460,562

6,467

Two things to remember about these calculations: First of all, they’re based on assumptions of interest rates, affordability, and current debt obligations.

That means they won’t necessarily match up directly with your own circumstances. They still give us a good guideline though.

The second thing to remember is that you'll normally only receive a home loan up to a maximum 90% of the value of the property. You still need to find a way to fund the 10% downpayment yourself.

PropertyGuru Loan Pre-Approval

Relevant Solution

PropertyGuru Loan Pre-Approval

 

What property can your salary afford?

Now that we’ve completed the number crunching, let’s take a look at whether your salary can buy property in Malaysia! And this, ladies and gents, is the exciting bit.

1) Annual income: RM17,500 (Average monthly income: RM1,458)

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Home Loan: RM86,500
Property Value: ~RM100,000

There are almost 1,000 properties on PropertyGuru today with a price range of RM100,000 or less. These affordable home choices offer a great place to stay in locations throughout the country.

The Green Garden development in Paya Terubong, Penang, presents a great example of affordable flats in this price range. 

This development has two 26-storey blocks, with each unit offering two bedrooms and two bathrooms. Apartments in this development provide a built-up area of 550 sq ft.

2) Annual income: RM25,000 (Average monthly income: RM2,083)

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Home Loan: RM142,962
Property Value: ~RM160,000

These amazing terrace houses of Residensi Lubok Jong are developed by Perbadanan PR1MA Malaysia in Gual Periok, Kelantan. Prices start from an attractive RM150,000.

A unit costing RM158,000 offers four bedrooms and three bathrooms over a generous 1,600 sq ft space. These homes come under Malaysia’s PR1MA housing programme.

You can discover more than 1,000 properties for sale priced RM140,000 - RM160,000 on PropertyGuru.

3) Annual income: RM30,000 (Average monthly income: RM2,500)

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Home Loan: RM180,679
Property Value: ~RM200,000

Sri Raya Apartments in the Taman Sepakat Indah area of Kajang is a great apartment complex with some ideal apartments in the RM200,000 range.

Apartments start at around RM190,000 for three bedrooms, two bathrooms, and an impressive 997 sq ft of high-rise living. 

This complex is a great example of affordable urban living combined with great connectivity, with nearby highways and Kajang KTM and MRT station offering some welcome accessibility.

If your household income is approximately RM30,000, you’ll be delighted to know there are over 2,300 properties for sale priced between RM180,000 and RM200,000 on PropertyGuru.

4) Annual income: RM35,000 (Average monthly income: RM2,917)

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Home Loan: RM218,395
Property Value: ~RM245,000

Nusa Heights is a freehold condominium complex in Nusajaya, Johor, offering excellent amenities and a range of great units starting from RM245,000.

The entrance price for an affordable studio unit provides 574 sq ft of luxury living in a well-maintained development. Residents gain access to a shared gym, swimming pool, and club house, as part of a secure guarded community.

This kind of accessible, affordable condominium is a great guide for this price range. Why not check out Meru Heights Residences @ Scientex Meru in Ipoh, or D'Camellia @ Setia Ecohill in Selangor, to see how similar properties look throughout the country?

There are approximately 4,000 properties in the price range of RM220,000 to RM245,000 on PropertyGuru.

5) Annual income: RM40,000 (Average monthly income: RM3,333)

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Home Loan: RM255,886
Property Value: ~RM285,000

If you want to take a look at properties for a household income of ~RM40,000, then the serviced apartments at ARC @ Austin Hills, Johor Bahru, offer a lovely view of affordability.

Prices at ARC @ Austin Hills range from RM243,000 through to RM450,000, providing an upmarket freehold serviced apartment with a range of outstanding on-site amenities. 

RM275,000 will get you a two-bedroom, two-bathroom 650 sq ft apartment, in this wonderful high-rise home.

Check out more than 4,000 properties across Malaysia priced at between RM270,000 and RM285,000 on PropertyGuru.

6) Annual income: RM50,000 (Average monthly income: RM4,167)

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Home Loan: RM331,320
Property Value: ~RM370,000

The Hipster @ Taman Desa offers trendy urban living on the edge of Kuala Lumpur’s beating heart. Like many urban condominium complexes in this price range, it combines attractive amenities with excellent connectivity. 

Residents are just 7 kilometers from KLCC itself, accessible by easy routes to major highways, as well as nearby MRT, KTM, and other public transport options.

Available units start from a reasonable RM359,000, offering three bedrooms and two bathrooms over 921 sq ft of hip urban living.

7) Annual income: RM100,000 (Average monthly income: RM8,333)

home-loan-salary-10

Home Loan: RM707,583
Property Value: ~RM785,000

Looking for a property that's situated further from the hustle and bustle of city life, but is still within easy reach of all the major hotspots in Kuala Lumpur, Selangor, and beyond?

Bennington Residences at Setapak fits that bill, and best of all, offers units that would fit the home loan amount! With built-ups ranging from 1,092 sq ft to 1,932 sq ft, you'd be able to choose one that best fits your needs and lifestyle.

With 2-acres of rainforest-themed facilities as well as a Triplex SkyLounge and SkyGym, you'll not only be getting a myriad of wellness amenities, you can actually get a really spacious unit of 1,570 sq ft that has 4 bedrooms and 3 bathrooms.

On PropertyGuru's listings page, you can leisurely browse through over 13,000 properties for sale that are priced between RM700,000 and RM785,000.

8) Annual income: RM200,000 (Average monthly income: RM16,667)

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Home Loan: RM1,460,562
Property Value: ~RM1,600,000

While a combined household income of RM200,000 certainly puts you ahead of the averages in Malaysia, it’s a great way to look at those aspirational properties that hard work and a lucrative career can earn you!

If we’re looking for the example of luxury urban living, where better to go than Kuala Lumpur’s renowned Mont Kiara neighbourhood? 

Trinity Pentamont in Mont Kiara is the image of a high-rise high-life in Kuala Lumpur. This exclusive condominium complex is currently under construction, with development expected to complete in 2022.

Apartments start at just over RM1.5 mil, offering up five bedrooms and four bathrooms over 2,057 sq ft. This really is the height of modern luxury in exclusive urban living.

With apartments in this range, there’s often a focus on low-density living, meaning you’re paying for the privilege of more space and even fewer neighbours. 

Trinity Pentamont boasts comprehensive security, immaculate grounds, and a range of exceptional amenities such as infinity pool, sky park, sunset grill, and yoga room. What a place to live!

 

Want to find out how to take your first step towards home ownership? Better find out How Long It Would Take You To Save For A Home’s Downpayment!

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