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Best Housing Loan Rates to Secure in June 2025

Version: CN, BM


Finding the best house loan interest rates in Malaysia can be challenging, especially with various options available.

Critical terms like home loan, housing loan, and loan tenure are crucial for making informed decisions.

This guide will help you navigate the different types of loans, their interest rates, and other essential aspects to consider when looking for a dream home.

In June 2025, several financial institutions in Malaysia offer competitive house loans and home financing options. Here’s a quick overview:

1. Best Housing Loan Rates in June 2025

Bank NameHouse Loan NameProfit RateFinancing TypeTenureLock-In Period
Maybank IslamicHouzKEYFrom 2.88% p.a.Term Islamic FinancingUp to 35 years1 Year
Bank IslamBaiti Home Financing-iFrom 3.8% p.a.Term Islamic FinancingUp to 35 years / age 70None
Standard CharteredMortgageOne
Mortgage One Zero Cost
From 3.9% p.a.
From 4.2% p.a.
Full-Flexi loanUp to 35 yearsNone
Bank of ChinaHousing LoanFrom 3.88% p.a.
Term loan
Up to 35 years3 Years
Public Bank5 Home PlanFrom 4.22% p.a.Semi-Flexi loanUp to 35 years3 Years
Source: Ringgitplus

These banks offer a range of housing and home loans that cater to different needs, whether you’re looking for a flexible or term loan.



1. Maybank Islamic HouzKEY

Maybank Islamic HouzKEY
Source: Maybank
RequirementsCriteria
Age18 to 70 years old
EligibilityMalaysian citizen only
Must not have more than one (1) home financing at the point of application
Salaried employee, Self-employed
Up to 3 guarantors allowed
Source: Maybank
Fees & ChargesCriteria
Late Penalty Fee1% p.a. on the outstanding amount
Processing Fee
No Fee
Early Settlement Fee
No Fee
Source: Maybank
BenefitsDescription
Full 100% FinancingGet full financing with no downpayment required
No Payment During ConstructionWe help to finance the cost during construction.
LOWEST Monthly PaymentEnjoy the lowest monthly payments with the best rates.
Source: Maybank

You may visit the Maybank website for more information.

2. Bank Islam Baiti Home Financing-i

RequirementsCriteria
AgeAge 18 and above
Minimum Annual IncomeRM24,000
EligibilityMalaysian Citizen
Not a bankrupt or have any legal action
Gainfully employed or Profitable business for at least 3 years
Minimum 1-year good payment track record
Source: Bank Islam
Fees & ChargesCriteria
Late Penalty Fee1% p.a. on the overdue installments until the date of full payment, and this applies to the Facility before maturity. If after maturity, you will be charged with a sum equivalent to the prevailing daily overnight Islamic Interbank Money Market Rate on the outstanding balance i.e., outstanding Sale Price less Ibra’, if any
Processing FeeWaived
Early Settlement FeeThere is no ‘lock-in period’ for this Facility, and Bank Islam shall grant Ibra’ on the deferred profit after full settlement is made.
Redemption Letter FeeThere is no ‘lock-in period’ for this Facility, and Bank Islam shall grant Ibra’ on the deferred profit after full settlement.
Letter for EPF Withdrawal FeeRM20 per request
Insurance TypesMRTT
MLTT
Houseowner/Householder Takaful
Source: Bank Islam
BenefitsCriteria
Margin of financingHigh Margin of financing up to 90%
No compounding elements
No penalty for early settlement
Tenureup to 35 years or age 70
No lock-in period
Source: Bank Islam

You may visit Bank Islam website for more information.

3. Standard Chartered MortgageOne

Standard Chartered
Source: Standard Chartered
RequirementsCriteria
Age21 to 70 years old
Minimum Gross IncomeRM4,000 / month
EligibilityMalaysians only
Salaried employee, Self-employed
Source: RiggitPlus
Fees & ChargesCriteria
Late Penalty Fee1% p.a. of the outstanding amount
Processing Fee
RM200 setup fee for MortgageOne™
Early Settlement Fee
NIL
Redemption Letter FeeRM50 per request
Letter for EPF Withdrawal FeeRM20 per request
Cancellation Fee2.25% of the loan amount if the bank bears the entry cost. Otherwise, it’s 0.5%
Insurance TypesFire Insurance
MRTA
Source: RiggitPlus
BenefitsDescription
Redraw FacilityWithdraw excess cash paid into your home loan account for personal use at any time without restrictions and penalty.
Priority Banking privilegeIf you’re a Standard Chartered Priority Banking customer, the bank might offer you lower interest rates (subject to approval).
Source: RiggitPlus

You May visit the Standard Chartered website for more information.

4. Bank of China Housing Loan

RequirementsCriteria
Age18 to 70 years old
Minimum Annual IncomeRM60,000
EligibilityMalaysians
Permanent Residents, Foreigners working in Malaysia
Salaried employee, Self-employed
Source: RiggitPlus
Fees & ChargesCriteria

Late Penalty Fee
1% p.a. on the amount in arrears causing the total outstanding to increase
Processing FeeWaived
Early Settlement Fee2.25% Prepayment/Full settlement within the first 3 years from the date of first release of the loan
Insurance TypesFire Insurance (Mandatory)
Houseowner Insurance (Optional)
MRTA (Optional)
MLTA (Optional)
Source: RiggitPlus

You may visit the Bank of China Malaysia website for more information

5. Public Bank 5 Home Plan

Public Bank 5 Home Loan
Source: Public Bank
RequirementsCriteria
Age21 to 70 years old
Minimum Annual IncomeRM24,000
EligibilityAny nationality
Salaried employee, Self-employed
Source: RiggitPlus
Fees & ChargesCriteria
Late Penalty Fee1% p.a. of the outstanding amount
Withdrawal FeeRM50 
Processing FeeRM50 to RM200, depending on the financing amount
Early Settlement Fee2% to 3% within 3-year retention period, depending on loan size
Redemption Letter FeeRM50 per request
Letter for EPF Withdrawal FeeRM20 per request
Insurance TypesMRTA
Source: RiggitPlus

You may visit the Public Bank website for more information

2. Understanding the Effective Lending Rate (ELR)

What is Effective Lending Rate (ELR)?
Source: Bank Negara Malaysia

The Effective Lending Rate (ELR) is a critical component when evaluating home loans. It represents the total cost of borrowing, expressed as an annual percentage rate. The ELR includes the reference rate and the spread, which collectively impact your monthly repayments.

  • Reference Rate: This is the base rate, like the Standardised Base Rate (SBR), which is influenced by Bank Negara Malaysia’s policies.
  • Spread: Additional charges include credit and liquidity risk premiums, operating costs, and the bank’s profit margin.

The ELR is crucial as it affects the total repayment amount and helps borrowers compare different loan products effectively.

What is the Reference Rate?

What is Reference Rate 2
Source: Bank Negara Malaysia

The reference rate is a benchmark interest rate used by Malaysian banks to determine the changes in borrowers’ repayments on floating-rate loans throughout the tenure.

This rate can vary between institutions but is a foundation for setting the lending rate.

Is the Reference Rate Equal to the Standardised Base Rate (SBR)?

No, the reference rate differs from the Standardised Base Rate (SBR). The SBR is a specific reference rate that standardizes the base rate across all banks.

Introduced on 1 August 2022, the SBR is directly linked to the Overnight Policy Rate (OPR) set by Bank Negara Malaysia.

This standardization aims to simplify the comparison of loan rates across different banks.

Is the Reference Rate Equal to the Overnight Policy Rate (OPR)?

The reference rate can include the OPR as a component, especially when the SBR is used.

The OPR is the interest rate at which banks lend to each other overnight and is set by the central bank.

Changes in the OPR directly influence the SBR, affecting the reference rate used for loans.

What is Spread?

The spread is an additional percentage added to the reference rate to arrive at the ELR. It covers various costs and risks incurred by the bank, including:

  • Credit Risk Premium: Compensation for the risk that a borrower might default.
  • Liquidity Risk Premium: Compensation for the risk associated with the bank’s liquidity.
  • Operating Costs: Day-to-day costs of running the bank.
  • Profit Margin: The bank’s earnings from the loan.

The spread is generally fixed for the duration of the loan unless there is a significant change in the borrower’s credit risk profile.

3. Understanding House Loan Interest Rates

Understanding House Loan Interest Rates

Understanding the mechanics of interest rates and how they impact repayments is essential for making informed decisions about Malaysian house loans.

What are House Loan Interest Rates?

House loan interest rates are the percentage banks charge on the loan’s principal amount.

These rates determine the cost of borrowing and are influenced by various factors, including the central bank’s policies and the individual bank’s cost structures.

How to Calculate House Loan Interest Rate?

How to Calculate House Loan Interest Rate
Source: Bank Negara Malaysia

Calculating your home loan interest rate is essential for understanding how much you will pay over time.

Use a home loan calculator to determine your monthly instalments and total repayment. Here’s an example:

Example Calculation:

  • Bank’s Base Rate (BR): 2.00%
  • Spread: 1.50%
  • ELR: BR + Spread = 2.00% + 1.50% = 3.50%

For a loan amount of RM300,000 over 30 years, the monthly instalment would include the interest and principal repayment. Understanding these calculations can help you save money and manage your loan tenure effectively:

  • Annual Interest Amount: RM300,000 x 3.50% = RM10,500
  • Monthly Interest Amount: RM10,500 / 12 = RM875

Thus, the monthly repayment would include RM875 in interest plus the principal repayment.

What Can Affect Your House Loan Interest Rate?

What Can Affect Your House Loan Interest Rates

Several factors can influence your house loan interest rate, including:

  • Central Bank Policies: Changes in the Overnight Policy Rate (OPR) by Bank Negara Malaysia can directly impact interest rates.
  • Economic Conditions: Inflation and economic stability can influence interest rates.
  • Borrower’s Credit Score: Higher credit scores often result in lower interest rates.
  • Loan Tenure: Longer loan tenures can sometimes attract higher interest rates.

4. How Should You Compare Lending Rates Across Banks as Borrowers?

How Should You Compare Lending Rates Across Banks as Borrowers

Comparing lending rates across banks involves more than just looking at the ELR. Consider the following steps:

  • Review the ELR and Spread: Compare the total cost of borrowing.
  • Understand Additional Fees: Be aware of any extra fees that might apply.
  • Read the Product Disclosure Sheet (PDS): This document provides crucial details about the loan.

5. How to Plan and Compare Your House Loan Interest Rates?

How to Plan and Compare Your House Loan Interest Rates

When planning a home loan, consider the property value, loan amount, and loan tenure.

Use a loan calculator to estimate your monthly instalments and ensure you understand all associated fees.

Planning and comparing Malaysia house loan interest rates require a strategic approach:

  1. Research Different Lenders: Identify potential lenders and their offerings.
  2. Interest Rates: Compare the interest rates offered by different banks.
  3. Additional Features: Evaluate foreclosure charges and other loan features. Some loans include extra funds withdrawal or linked current accounts for easier management.
  4. Read Reviews: Learn from the experiences of other borrowers.
  5. Seek Professional Advice: Consult with financial advisors if needed.
  6. Maximum Loan Tenure: Most banks offer up to 35 years.
  7. Prepayment Options: Check if the bank allows for additional payments without penalties.
  8. Insurance Requirements: Most housing loans require Mortgage Reducing Term Assurance (MRTA) or other types of insurance.
  9. Flexibility: Compare loans that offer flexible repayment options, like a flexi loan or semi-flexi loan (make sure to understand the terms and conditions).

Critical Terms in Home Financing

Understanding key terms related to home financing is crucial for navigating the market:

  • Outstanding Principal Balance: The remaining amount you owe on your loan, excluding interest.
  • Home Loan Balance: The total amount left to pay on your home loan.
  • Basic Term Loan: A standard loan with fixed interest rates and repayment terms.
  • Loan Period: The total time over which you will repay the loan.
  • Mortgage Reducing Term Assurance: Insurance that decreases as your loan balance decreases.
Best House Loan Interest Rate in Malaysia

Choosing the right house loan or home loan in Malaysia requires careful consideration of several factors, including the interest rate, loan tenure, and associated fees.

By understanding the options available and using tools like a home loan calculator, you can make a more informed decision that aligns with your financial goals and helps you secure your dream home.


Are you looking for a dream house after getting the best house loan interest rates? We can assist you! Send us your details, and we will contact you soon!


Continue Reading:

  1. OPR Remains at 3%: How Does This Affect Housing Loans?
  2. Is Now the Perfect Time to Invest in Malacca’s Property? Explore Malacca’s Potential!
  3. Fixed Deposit: Which Bank Has the Best FD Rates for July 2024? + Quick Guide to Fixed Deposits (FD & FD-i)

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