Home Loan Calculator

When you pay your monthly instalments, part of it goes towards paying the principal, while part of it goes towards paying the interest.

With home loans, the amount of interest you pay is different every month. This is because the interest is only calculated on the remaining principal amount. In comparison, you pay the same amount of interest on personal loans and hire purchase (car) loans throughout your entire loan tenure.

As the manual calculation can be very complex, the easiest way to know how much interest and principal you're paying for each instalment is to use a home loan calculator. PropertyGuru's Home Loan Calculator gives you an easy, hassle-free estimate of your property's monthly repayments.

Read up on all the home loan basics you need to know in our Complete Guide to Home Loans in Malaysia.

A downpayment is the initial lump-sum, out-of-pocket payment that is made towards the purchase price of your home. Buyers are typically required to pay a minimum 10% of the property’s purchase price.

This means that if your house costs RM400,000, you will be required to pay at least RM40,000 upfront. The remaining 90% can be paid using a house loan.

Property purchase price - Loan Amount = Downpayment
RM400,000 - (90% x RM400,000) = RM40,000

The first part of your monthly home loan repayment is the principal. The principal loan amount on your housing loan is the actual amount of money borrowed from the bank. In Malaysia, most banks will lend up to 90% of the property’s purchase price to first-time homeowners (if 10% downpayment is paid).

For instance, you place a 10% downpayment on an RM500,000 house, which is RM50,000. You manage to get a 90% loan amount to cover the remaining cost of the house. In this case, your principal loan amount is RM450,000.

With home loan repayments, the amount of interest is calculated based on the outstanding principal balance. This means that the amount of interest you pay every month will be different.

At the beginning of your loan tenure, the bulk of your monthly repayments go towards paying down the interest. Towards the end of your loan tenure, the bulk of your monthly repayments go towards paying down the principal.

You can use the Reducing Balance method to calculate exactly how much interest you’ll be paying each month. Here’s the formula, along with an example (assuming your house loan’s outstanding principal on the 1st month is RM450,000, and your interest rate is 3.0% p.a.)

Outstanding Principal x Interest Rate/12 = Interest payable per instalment RM450,000 x 0.0025 = RM1,125

This means that the amount of interest payable for the first month would be RM1,125.

A good rule of thumb is that banks will loan you up to 30% of your gross income annually.

For instance, let’s say your annual income is RM50,000. 30% of that figure is RM15,000. Hence, banks will likely loan you a maximum of RM525,000 (RM15,000 x 35) for a 35-year loan tenure.

However, your income isn’t the only factor that impacts the amount of housing loan you’re eligible for. Another important factor to consider is your Debt Service Ratio (DSR), which measures a person’s debt against their household income.

Read more on how much home loan you can get based on your salary here.