You Can Use Your EPF Money To Purchase A Property!

Did you know you can tap into the Account 2 of your Employees Provident Fund (EPF) for help in financing your home loan? We'll walk you through the requirements and step-by-step process here!
EPF, KWSP, buy house, buy property, finance, housing loan, pay loan, purchase a property

Klik sini untuk versi BM.

 

If you’re planning to buy a property, affordability could be a huge roadblock to owning your home in Malaysia.

While a bank loan is necessary (if you don’t have the entire sum in cash), you have an additional source of savings if you are a citizen or Permanent Resident in Malaysia!

You can tap into your Employees Provident Fund (EPF) for help, but only via Account 2.

EPF_Bad Luck Brian

Here’s how to use your EPF savings to help finance your home and pay the housing loan!

 

Step 1: Determine How Your EPF Money Will Be Used

Understanding Your EPF Funds

% of distribution from monthly contribution

70%

30%

Purpose

  • Retirement savings
    (Cannot be withdrawn before the age of 55)
  • Financing a home
  • Financing education (yours or your children’s)
  • Medical expenses

The money you have in your EPF is divided into two. Account 1 is meant for your retirement, but you can use Account 2 for the purposes of funding your home.

Your Account 2 money can be withdrawn to:

  • Purchase/build first (or second house; provided that the first house has been sold or disposed) house. To use Akaun 2 to purchase a property, you will need to show evidence that you have paid the booking fee and down payment for the property, together with the lawyer fee and stamp duty for the SPA.
  • Reduce/redeem the housing loan for first or second house.
  • Assist spouse to reduce/redeem his/her housing loan.

Amount Allowed For Withdrawal

Individual Purchase

Joint purchase with spouse of immediate family members or other individual

(SPA Price - Loan amount) + (10% of SPA Price)

OR

All savings in Account 2

(SPA Price - Loan amount) + (10% of SPA Price)

OR

All savings in respective buyers’ Account 2, subject to the maximum amount eligible for withdrawal

Full Housing Loan Approved

Self-Financing

10% of SPA price

OR

All savings in Account 2

The purchase price with an additional 10% of the purchase price

OR

All of member’s savings in Account 2

 

Step 2: Check Your Eligibility

You are:

  • A Malaysian Citizen; or
  • A Malaysian Citizen who has made Leaving the Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; or
  • A Non-Malaysian Citizen who:
    • Has become an EPF member before 1 August 1998.
    • Has obtained a Permanent Resident ("PR") status.
  • You have not reached the age 55 at the time the EPF receives your application.
  • You have a minimum savings balance of RM500.00 in your Account 2.
  • Your property intended for purchase must be for residential purposes only.
  • Your application must be made within 3 YEARS of signing the SPA.

 

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Step 3: Prepare Your Documents

  • EPF withdrawal form [Form KWSP 9C(AHL)].
  • The original copy of the Sale & Purchase Agreement (SPA).
  • Photocopy of your Identification Card (myKad or Passport).
  • A copy of the letter of loan approval from your end-financier.
  • Bank account information, in the form of a passbook or a bank statement.
  • Proof of relationship
    • This is for joint purchases involving your spouse or next-of-kin, parents or siblings. For joint purchases involving next-of-kin, you are required to submit an explanation letter stating the reason for the joint purchase.
PropertyGuru Loan Pre-Approval

Relevant Solution

PropertyGuru Loan Pre-Approval

 

Step 4: Apply For Withdrawal Through i-Akaun

It is possible for you to apply for withdrawals online using your i-Akaun. If you have not registered yet, then follow these steps:

  1. Register for your i-Akaun at your nearest EPF kiosk or counter. You will be given a temporary username and password.
  2. Within 30 days, visit www.kwsp.gov.my. Click on the “Members Login” button on the top right.

EPF, KWSP, buy house, buy property, finance, housing loan, pay loan, purchase a property

  1. Under “User ID”, key in the username provided to you. Then click “Next”.

EPF, KWSP, buy house, buy property, finance, housing loan, pay loan, purchase a property

  1. Under “password”, key in the password provided to you. Then click “Next”.

EPF, KWSP, buy house, buy property, finance, housing loan, pay loan, purchase a property

  1. On the next screen, you will be shown the Terms & Conditions. Select “Agree” and click “Next”.
  2. The following screen entitled “i-Akaun Activation” is where you can enter your own password. For security purposes, you are also required to select an image and a secret phrase, both of which you should remember (This is to ensure that you are logging in to a correct website as opposed to a fake one mimicking the EPF website).
    7. Your i-Akaun is now ready. 

Once logged in, head to the “Withdrawals” page and click on “New Application” to start your application process.

EPF, KWSP, buy house, buy property, finance, housing loan, pay loan, purchase a property

 

Other Ways You Can Use Your Akaun 2 For Property-Related Matters

1) Pay Home Loan Monthly Instalment

You can also arrange for the money in your Akaun 2 to be used to pay for your housing loan on a monthly basis.

This can either be done as standing instructions directly paid to the lending bank, or credited into your personal account.

You just need to submit your latest housing loan balance form to KWSP along with other supporting documents. The only catch is that you can only cancel these automatic payments after 1 year.

2) Increase your borrowing power

This is useful if you need to show your lending bank evidence of a higher income, so that you can qualify for a higher property loan.

Under its Flexible Housing Withdrawal facility, you can apply to EPF to set aside a certain amount of money from your monthly contributions into a special Flexible Housing Withdrawal Account.

These contributions are treated as your income, and can help you qualify for a higher loan amount.

For further enquiries or additional information, contact:

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