What Happened to DIBS and Why Was It Banned?
DIBS was a scheme where the developer paid the interest on your home loan while the property was still under construction. It sounded like a win-win because you didn't have to service your loan until you actually got your keys.
However, there was a major catch that many buyers overlooked. Developers usually "hid" the cost of that interest by marking up the property price, which created an artificial bubble.
To protect the economy and stop people from flipping houses they couldn't actually afford, BNM banned DIBS for all residential projects. This move ensures that buyers are more financially responsible from day one of their purchase.
Can You Still Find DIBS in 2026?
The short answer is no. Any developer offering "Interest Capitalization Schemes" (ICS) for residential properties is essentially breaking BNM's strict guidelines.
If you see something similar today, it’s usually just a creative marketing rebate or a different financial arrangement. Always clarify if a scheme is a true DIBS or simply a temporary discount on your initial costs.
The "Net Selling Price" Rule: Impacting Your Downpayment
Before the crackdown, banks would give you a 90% loan based on the price listed in your Sale and Purchase Agreement (SPA). If the SPA said RM500,000, the bank gave you RM450,000 even if the developer gave you a secret rebate.
In 2026, BNM is very strict about Loan-to-Value (LTV) ratios based on the Net Selling Price. This means the bank looks at the actual price after all discounts, rebates, and incentives are deducted.
This change significantly increases the amount of "upfront cash" you need to have ready. You can no longer rely on inflated SPA prices to cover your 10% downpayment through rebates.
How it Affects Your Wallet: A 2026 Calculation Example
Let’s see how this rule changes the amount of cash you need to prepare for a home. Imagine you are buying a new condo in Cheras with a 10% rebate.
| Item | Old Way (Before Curb) | 2026 Way (Current Rule) |
|---|---|---|
| SPA Price | RM600,000 | RM600,000 |
| Rebate Offered (10%) | RM60,000 | RM60,000 |
| Net Price | RM540,000 | RM540,000 |
| Loan Margin (90%) | Based on SPA Price | Based on Net Price |
| Loan Amount | RM540,000 | RM486,000 |
| Cash Downpayment | RM0 | RM54,000 |
As you can see, under the current rules, you actually need to pay RM54,000 in cash or use your EPF funds. The bank will only lend you 90% of the discounted price, not the original SPA price.
Is "Zero Downpayment" Still Possible in 2026?
Technically, achieving a zero downpayment is much harder now, but not entirely impossible for specific buyers. Some developers offer cashback or furniture vouchers that don't officially count as a price rebate during the loan application.
You might also look into government-backed schemes like Skim Jaminan Kredit Perumahan (SJKP). This scheme can allow for 100% financing for eligible first-time buyers, including those in the gig economy.
However, for most standard commercial bank loans, you should always expect to pay at least 10% of the net price upfront. Preparing this safety net will make your application process much smoother.
3 Things to Check Before Buying Property in 2026
- The Final Net Price: Always ask the salesperson for the "net price after all rebates" because this is what the bank uses for your loan.
- Additional Entry Costs: Don't forget to budget for legal fees, stamp duty, and valuation fees, which can add 3-5% to your costs.
- Your Debt Service Ratio (DSR): Banks in 2026 are very cautious, so ensure your total monthly debt (car loan + credit cards) doesn't exceed 60-70% of your net income.
Frequently Asked Questions (FAQ)
Q: Does the LTV curb apply to my first home?
A: The "Net Price" rule applies to everyone, but first-time buyers can still get a 90% loan margin. However, your third home loan will usually be capped at a 70% LTV.
Q: Why is BNM so strict about these rules?
A: To prevent a property bubble and ensure buyers can handle their instalments. If interest rates (OPR) go up, buyers with "zero money down" are at a higher risk of defaulting.
Q: Can I use my EPF to cover the downpayment?
A: Yes! You can withdraw from your EPF Akaun Sejahtera (formerly Account 2) to cover the difference between the loan amount and the purchase price.
Q: Are there any exemptions for affordable housing?
A: Yes, certain government projects like PR1MA or Rumah Selangorku may have different financing rules. Always check the specific project guidelines before committing.
Q: What happens if the bank valuation is lower than the net price?
A: If the valuation is lower, the bank will base the 90% loan on the valuation amount, meaning you might need to pay even more cash upfront.
Conclusion
While the abolishment of DIBS and the shift to Net Price LTV calculations might seem like a hurdle, they actually protect you. These rules ensure that the price you pay is the fair market value and that you aren't overleveraging yourself.
Ready to see how much you can afford in today's market? Compare your loan options with Loanstreet’s Home Loan Eligibility Report to see which bank gives you the best deal for your 2026 property hunt.
