Home Loan Calculator
Plan your home ownership journey with precision. Our calculator uses the standard reducing balance method used by Malaysian financial institutions.
Loan Details
Extra Monthly Payment
DifferentiatorSee how much you can save by paying a little extra each month.
Affordability (DSR)
Salary after EPF, SOCSO & Tax
Car, Personal, Credit Card, etc.
Estimated Entry Costs
Malaysian RatesSPA Agreement
Loan Agreement
Monthly Installment
reducing balance formula
Includes loans & extra payments
Monthly Installment
RM 0
Monthly Installment
reducing balance formula
Total Commitment
RM 1,000
Includes loans & extra payments
Understanding Home Loan Interest in Malaysia
Malaysian home loans typically use Reducing Balance Interest. This means interest is calculated based on the outstanding principal balance of your loan each month.
As you pay off your principal, the interest portion of your monthly installment decreases, while the principal portion increases. This is why making extra payments (in Flexi or Semi-Flexi loans) can significantly reduce your total interest paid and shorten your loan tenure.
What is Debt Service Ratio (DSR)?
Debt Service Ratio (DSR) is a formula used by banks in Malaysia to calculate whether you can afford the loan you are applying for. It compares your total monthly commitments to your net monthly income.
DSR Formula:
(Total Monthly Commitments / Net Monthly Income) × 100%
Generally, most banks in Malaysia have a DSR limit of 60% to 70%. However, this limit can be higher for high-income earners. If your DSR is too high, your loan application might be rejected, regardless of how good your credit score (CCRIS/CTOS) is.
Ways to Improve Your DSR:
- Settling small debts: Closing credit cards or personal loans you no longer need.
- Consolidating debt: Combinining multiple loans into one with a lower interest rate/longer tenure.
- Declaration of income: Ensure all income sources (like rental income or dividends) are documented.