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Can You Afford THIS Property if Your Salary Is Only RM2,500?

Updated 02 Nov 2018 – By Caitlyn Ng


Unless you’re earning millions of Ringgit a year, sorry lah, buying a property isn’t going to be that simple. For those earning a normal pay cheque, you’ve probably already had this question in mind: what property can I afford to buy based on how much I’m earning each month?

First off, you need to be aware that apart from your salary, there are SO MANY other factors which you’d need to consider too. From your current monthly expenses right up to the state of the country’s economy, there’s no clear-cut answer to that question. How unfortunate, you might think.
 
Don’t worry, what you CAN do is refer to the simple guide we’ve provided below! Using a reliable tool to help us, we took a few samples of typical Malaysian salaries and calculated the maximum loan amount* you’d be able to get. You see, once you’ve figured out your eligibility for a home loan, it’ll be much easier for you to hunt for a property in the right price range.
*Based on a 90% overall loan; 35 year tenure; 5% interest rate; and after the necessary tax, EPF and SOCSO deductions.

Here’s what each salary amount can get you, with visual examples from iProperty:
 

1) RM1,500

You can afford to buy a house with an indicative amount of up to RM178,000 with a repayment of RM900 each month.



 

2) RM2,500

You can afford to buy a house with an indicative amount of up to RM297,000 with a repayment of RM1,500 each month.



 

3) RM4,000

You can afford to buy a house with an indicative amount of up to RM554,000 with a repayment of RM2,800 each month.



 

4) RM6,000

You can afford to buy a house with an indicative amount of up to RM832,000 with a repayment of RM4,200 each month.



 

5) RM8,000

You can afford to buy a house with an indicative amount of up to RM1.2mil with a repayment of RM6,400 each month.



 

6) RM10,000

You can afford to buy a house with an indicative amount of up to RM1.5mil with a repayment of RM8,000 each month.



 

But wait, you nearly forgot the most important factor!

Bearing in mind that the property prices above are just really rough estimates, there are a couple of other factors that will have an impact on the final loan amount you'd be eligible for. One of the most important factor is your Debt Service Ratio (DSR). This is a calculation that’s able to show how much of your net income will be used for paying off your monthly debt instalments.
 

DSR = Commitment / Income


Between different banks, there can be major differences in the final DSR amount that is calculated. This is because every bank has their respective calculation methods for income and commitment recognition. However, a good rule-of-thumb is to have a DSR amount that’s below 70%. 
 

Know how much debt you can actually afford to take on

Making sure that you’ve got all the major aspects taken into consideration – the DSR, your CCRIS and CTOS reports, as well as your monthly commitments – can be quite scary and confusing, even for the best of us! If you want more accurate results that actually take into account all of the above, we’ve got just the right tool for you!

Loanstreet’s Home Loan Eligibility Report is a comprehensive report which will automatically provide you with all the accurate (up to 95% accuracy) information you’d need, instantly at your fingertips. You’ll be given both the loan and instalment amount for 15 banks, and rating guidelines to show which banks are likelier to approve your application.

Goodbye inconvenience, hello seamless experience!
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