Second and Third Home Loans in Malaysia: How the 70% Margin Rule Works
The 70% cap on a third property loan in Malaysia comes from Bank Negara Malaysia’s press release of 3 November 2010: a “maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower”. BNM’s later description of the same measure is more precise — it applies to the third and above outstanding house financing. The cap attaches to the borrower, not to the property, and first and second loans are left to each bank’s own credit policy. One thing to clear up first: the RM600,000 threshold people attach to this rule appears in no BNM source.
Short answer
BNM’s press release of 3 November 2010 caps the margin at 70% on a borrower’s third house financing facility, and BNM’s later description applies it to the third and above outstanding housing facility. The cap follows the borrower, not the price — no BNM source contains the RM600,000 threshold people quote. Settled loans leave the count, joint loans count against both borrowers, and companies are capped at 60%.
Key numbers at a glance
| Source of the rule | BNM press release, 3 November 2010 |
|---|---|
| What it applies to | Third and subsequent outstanding housing facility |
| Cap | 70% for individuals; 60% for non-individuals |
| 1st and 2nd loans | Each bank's own policy; commonly up to 90% |
| Price threshold | None; the RM600,000 figure is in no BNM source |
| Settled loans | Not counted, but CCRIS updates after the 10th next month |
| Joint loans | Sit on both borrowers' profiles (bank practice) |
| RM500,000 third property | RM150,000 down payment; about RM172,225 cash |
Key points in 30 seconds
- BNM caps the margin at 70% on a borrower’s third and subsequent outstanding housing facility; first and second loans follow each bank’s own policy.
- There is no RM600,000 threshold. It appears in no BNM document — it is a worked-example price that has been repeated until it reads like a rule.
- Fully settled loans drop out of the count, but CCRIS normally only updates on the 10th of the following month.
- A joint loan sits on both borrowers’ CCRIS profiles, and banks typically apply the 70% cap to the whole facility if either applicant already has two outstanding housing loans — this is bank practice, not published BNM wording.
- Non-individual (company) borrowers are capped at 60% on residential property, a separate measure introduced in December 2011.
- The cash difference is large: on a RM500,000 third property the down payment goes from RM50,000 to RM150,000, and total upfront cash is about RM172,225.
What BNM actually said, and when
The rule comes from BNM’s press release of 3 November 2010, “Measures in Promoting a Stable and Sustainable Property Market and Sound Financial and Debt Management of Households”. The wording is a “maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower”.
The same release confirms that first and second home financing were not affected and remain “subject to individual banks’ existing credit policies”. In November 2014, describing the same measure to the Bank for International Settlements, BNM’s Deputy Governor put it more precisely: “A maximum limit of 70% was imposed on the third and above outstanding house financing.” The operative word is outstanding.
| Situation | Maximum margin | Source of the limit |
|---|---|---|
| 1st housing loan | Commonly up to 90% | Bank policy, not a BNM rule |
| 2nd housing loan | Commonly up to 90% (some guides say 80%) | Bank policy; the letter of offer governs |
| 3rd and subsequent outstanding | 70% | BNM press release, 3 November 2010 |
| Non-individual (company) buying residential | 60% | BNM, December 2011 |
The title of the release tells you the purpose: it was a package aimed at a stable property market and sound household debt management. The same generation of measures brought the 35-year maximum housing loan tenure, the ban on developer interest-bearing schemes, lending on the net selling price after rebates, and affordability assessed on net income. As at September 2026 I found no amendment or repeal of the 70% cap, and no recent BNM page restating it — so its continued force rests on the absence of anything to the contrary.
Does the 70% rule only apply above RM600,000? No
This is the single most repeated error about the rule, and it is not in any BNM source. The 2010 release states no price threshold. BNM’s 2014 description states none. The property guides and tax-firm notes I checked do not present RM600,000 as a condition either.
The likely origin is innocent: several guides use “a RM600,000 third property needs RM180,000 in cash” as a worked example, and the example has been retold until it reads as a threshold. The practical position is simpler — whatever the price, if this is your third or subsequent outstanding housing facility, 70% applies.
On a RM500,000 third property, budgeting at 90% means preparing about RM74,075. Approved at 70%, you need about RM172,225. That gap of roughly RM98,000 falls due within weeks of signing the sale and purchase agreement, and failing to complete can cost you the 10% deposit already paid — RM50,000. Ask the bank where this loan lands in your count before you make the offer.
Ask Louis directly
Tell me what housing loans are still outstanding in your name and I will tell you whether this purchase is treated as your third, and what cash it needs.
I will prepare a free side-by-side cash requirement at 70% and at 90% so you know where you stand before making an offer.
What counts as an outstanding housing loan?
- It counts borrowers, not properties. The cap follows the individual: how many outstanding housing facilities are in your name decides where this new one lands in the count.
- Settled loans drop out. As the tax firm NBC puts it, “for loans which was fully settled or repaid, those loans will not be taken into the count”. Sell one and redeem the loan and your count goes down by one.
- Allow for the reporting lag. CCRIS data is reflected “on the 10th of the subsequent month, subject to public holidays”, so a settled account can take up to about six weeks to disappear from the report the bank pulls.
- Serviced apartments are included. NBC describes the scope as a residential house or apartment, including serviced apartments. How a bank treats a commercial-title SOHO or a shoplot is its own policy — ask before you apply. Property types are explained in types of property in Malaysia.
- Company borrowings sit outside your personal count, but the company itself is capped at 60%.
You do not need to guess your count. Pull your own report from eCCRIS: BNM states it is free with no restriction on how often you request it, and it shows “outstanding or active accounts, pending credit application, and approved credit applications for the last 12 months”. How to read it is covered in DSR, CCRIS and CTOS explained.
What about a second home loan?
A second housing loan is outside the 70% cap. BNM’s 2010 release states that first and second home financing were not affected and remain subject to each bank’s own credit policy; market practice is commonly up to 90%, though some guides quote 80% on a second loan. The letter of offer is what governs, and it varies by bank and package.
- On a second property the binding constraint is usually DSR, not margin. The instalment on the first housing loan counts in full against you. Whether rental income is recognised, and at what haircut, is each bank’s own policy — ask before you apply.
- The first-home stamp duty exemption is gone. It requires that you have never owned any residential property, including one inherited or received as a gift, and including a share held jointly.
- Once the second loan is outstanding, the next purchase falls under the 70% cap. Plan the cash for a third property at the point you buy the second, not later.
- If you plan to sell the first to fund the second, price the RPGT first. For citizens and permanent residents it is 30% in years 1–3, 20% in year 4, 15% in year 5 and 0% from year 6, and the once-in-a-lifetime private residence exemption has to be elected. See selling property and RPGT.
First-time buyer conditions are set out in first-time homebuyer incentives, and how much you can borrow comes back to income and commitments in what house price your salary affords.
Do joint loans and my spouse's loans count against me?
To be straight about the evidence: BNM’s public release does not deal with joint borrowers, and the detailed circular to banks is not published. What follows is how banks apply it in practice, not quoted BNM policy.
- A joint facility sits on both CCRIS profiles. One joint housing loan adds one outstanding housing loan to each borrower’s record.
- The worst profile governs. The market description is that if any one of the joint applicants already has two outstanding housing loans, the new joint application is usually treated as that person’s third, and the 70% cap is applied to the whole facility.
- A spouse’s loan in their sole name does not appear on your CCRIS and generally does not add to your count — but the moment you apply jointly, both counts and both sets of commitments are on the table.
- “One name on the loan, two on the title” is legal, and it is the usual suggestion. The trade-off is real: the non-borrowing owner’s income cannot support the loan, the DSR is assessed on one income, and some banks will not accept the structure. Weigh it in joint purchase and joint home loan.
Want to see what you can actually buy?
The rules are above; these are the actual homes. Each page lists the projects I am tracking, with published price ranges and the date each figure was checked. Tell me the area on WhatsApp and I will send the current list.
What does 70% instead of 90% cost in cash?
| Price | Down payment at 90% | Down payment at 70% | Difference |
|---|---|---|---|
| RM500,000 | RM50,000 | RM150,000 | +RM100,000 |
| RM700,000 | RM70,000 | RM210,000 | +RM140,000 |
| RM1,000,000 | RM100,000 | RM300,000 | +RM200,000 |
Add stamp duty and legal fees for the real number. The table below assumes a subsale, a buyer who is not a first-timer, a 70% loan, and full Table A legal fees under the Solicitors’ Remuneration Order 2023 with no discount, plus 8% SST.
| Price | Down payment 30% | MOT stamp duty | Loan agreement duty 0.5% | Legal fees + 8% SST | Total | Instalment (4% illustration, 35 years) |
|---|---|---|---|---|---|---|
| RM500,000 | RM150,000 | RM9,000 | RM1,750 | RM11,475 | RM172,225 | about RM1,550 |
| RM700,000 | RM210,000 | RM15,000 | RM2,450 | RM15,525 | RM242,975 | about RM2,170 |
| RM1,000,000 | RM300,000 | RM24,000 | RM3,500 | RM21,060 | RM348,560 | about RM3,099 |
Watch the timing of the cash, not just the amount. On a subsale you pay a 2%–3% earnest deposit at the offer, top the deposit up to 10% at the sale and purchase agreement, and settle the balance within the completion period, typically three months plus a one-month extension. The extra 20% of the price that the cap creates has to be in hand within months, not saved up over years.
- For comparison, the same RM500,000 house at a 90% margin needs about RM74,075 in cash with an instalment of about RM1,992. So the cap costs roughly RM98,000 more cash and saves about RM442 a month.
- The first-home stamp duty exemption does not help here: it requires that you have never owned any residential property, which a third-property buyer cannot satisfy.
- The rate is an illustration, not a quote. Run your own numbers in the buying costs calculator, and see the full cost list in how much money you need to buy a house.
Legitimate ways to plan around it — and what each one costs
- Sell or redeem one loan first. A settled loan leaves the count. Two practical points: CCRIS usually only reflects the settlement after the 10th of the following month, and selling has its own costs — agent fee, legal fees, early settlement penalty and RPGT. See selling property and RPGT and refinancing and settling your loan.
- Borrow in the name with the shorter count. Where spouses have different counts, applying in the name of the one with fewer outstanding housing loans may keep the margin at the bank’s normal level. The price is that only one income supports the DSR, so the approved amount is usually smaller — see what house price your salary affords.
- Prepare the cash and take the 70%. The cleanest option. You pay more upfront, and in exchange the instalment and the total interest are lower.
- Buy through a company. The margin is 60%, which is lower, not higher. Weigh the rest before deciding: a company pays RPGT at 30% in years 1–3, 20% in year 4, 15% in year 5 and 10% from year 6, with no RM10,000 or 10% exemption and no once-in-a-lifetime private residence exemption, both of which are for individuals; and if the company is a foreign company, MOT stamp duty on residential property is a flat 8% from 1 January 2026. There are also annual audit and secretarial costs. Take this route on your accountant’s and lawyer’s advice, not for the margin.
- Look at non-residential property. The 70% cap is a house financing measure. Commercial property has its own margins and conditions at each bank — along with different rental, valuation and liquidity characteristics.
Four things to do before you make an offer
- Pull your own CCRIS reportDownload it free from eCCRIS and count the outstanding housing facilities in your name, including any joint ones.
- Account for loans you have settledFully settled loans do not count, but confirm CCRIS has caught up — that usually means after the 10th of the following month.
- Ask the bank where this one landsTell the bank or your loan agent your current count and any joint facilities, and ask them to confirm in writing whether this application is treated at 90% or 70%.
- Budget at 70% before you signIf there is any doubt, prepare the cash for 70%. If it comes back at 90% you are simply holding spare cash; the other way round you are in breach.
The full financing timeline is in the home loan application process, and what to do after a rejection is in fixing your credit before a home loan.
Related questions
Will my existing 90% loan be repriced to 70% when I buy a third property?
No. The cap applies to the facility being taken out, so loans already signed and disbursed are not revisited or adjusted. The traffic runs the other way: because those older loans are still outstanding, they push the new one into third place. If you want to reduce the count, you sell or redeem first — see refinancing and settling your loan.
Is the DSR assessment stricter on a third home loan?
Margin and DSR are separate tests. The 70% margin is BNM’s cap; the DSR threshold is each bank’s own policy and BNM publishes no figure. In practice the instalments on your first two housing loans count in full against your DSR, so the binding constraint on a third purchase is often DSR rather than margin. Whether rental income is recognised, and how much of it, differs by bank — ask before applying.
What happens if the valuation comes in below the price?
Banks lend on the lower of valuation and purchase price, so on a third property the 70% is applied to the lower figure and you fund the rest. On a RM520,000 purchase valued at RM500,000, 70% is RM350,000 and the cash gap becomes RM170,000 instead of RM156,000. Check transacted prices before you offer — see property valuation and transacted prices.
Can I use EPF to cover the bigger down payment?
Usually not. The EPF housing withdrawal requires that this is your first house or that the previous house has been sold, so a buyer still holding two properties does not qualify. Akaun Fleksibel can be withdrawn at any time for any purpose, but that is not a housing withdrawal. The conditions are in EPF withdrawal for housing — do not build it into your cash plan for a third property.
Frequently asked questions
Is a third property loan in Malaysia really capped at 70%?
Yes, where it is your third or subsequent outstanding housing facility. BNM’s press release of 3 November 2010 imposed a maximum 70% LTV on the third house financing facility taken out by a borrower, and BNM’s 2014 description states it applies to the third and above outstanding house financing. First and second loans are left to each bank’s own credit policy. No repeal or amendment was found as at September 2026.
Does the 70% rule only apply to properties above RM600,000?
No. There is no price threshold in any BNM source. RM600,000 shows up in property guides only as a worked-example price, and the example has been repeated until it sounds like a rule. Whatever the price, the cap applies once this is your third or subsequent outstanding housing facility. If someone insists otherwise, ask to see the BNM release or circular.
I own three properties but two loans are fully paid. Which loan is this?
Your first outstanding housing facility, because the rule counts outstanding loans and not the number of properties you own. Fully settled loans drop out of the count. Mind the timing: a settled account normally only leaves your CCRIS report after the 10th of the following month, so applying immediately after settlement may put the old count in front of the bank.
Do joint home loans count against both borrowers?
Yes. A joint facility appears on both borrowers’ CCRIS profiles, so each of them carries one more outstanding housing loan. Market practice is that if any one joint applicant already has two outstanding housing loans, the new joint facility is treated as that person’s third and the 70% cap is applied to the whole loan. Note that BNM’s public release does not spell out joint treatment — this is how banks read CCRIS.
Does my spouse's housing loan affect my margin?
If you are not a borrower on it, it does not appear on your CCRIS and generally does not add to your count. But once you apply jointly, both counts and both sets of monthly commitments are assessed: the count follows the worse profile and every commitment goes into the DSR. Before buying a second or third property, both of you should pull your own CCRIS reports first.
Is the margin higher if I buy through a company?
No, it is lower. Non-individual borrowers buying residential property are capped at 60%, a separate BNM measure from December 2011. Company ownership also changes the exit: RPGT is 30% in years 1–3, 20% in year 4, 15% in year 5 and 10% from year 6, with none of the individual exemptions, and a foreign company pays a flat 8% MOT stamp duty on residential property from 2026. Annual audit and secretarial costs apply too.
How much cash do I need for a third property?
On a RM500,000 subsale at a 70% margin, for a buyer who is not a first-timer, with full Table A legal fees plus 8% SST: RM150,000 down payment, RM9,000 MOT stamp duty, RM1,750 loan agreement duty and about RM11,475 in legal fees — roughly RM172,225 in total. The same house at a 90% margin needs about RM74,075. Valuation, insurance, renovation and disbursements are on top.
Sources & verification
- BNM — Measures in Promoting a Stable and Sustainable Property Market (3 Nov 2010)
- BNM / BIS — Malaysia's experience in macroprudential policies (13 Nov 2014)
- NBC — BNM ruling on the 70% third housing loan cap
- NextSix — Margin of finance (LTV) in Malaysia: first, second, third property, joint borrowers
- PropertyGuru — Loan-to-value (LTV) ratio for residential mortgage loans in Malaysia
- BNM — CCRIS FAQ (what the report shows, free access)
- PwC Malaysia — Real Property Gains Tax
- RDS Law Partners — Key stamp duty changes in Malaysia from 1 January 2026
Verified: 2026-09-20. This guide is general information, not legal, tax or financial advice. Rules and rates change — confirm in writing with your lawyer, bank or the relevant authority before you sign.
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Louis Koh
11 years in Malaysian property · Johor Bahru & Kuala Lumpur · English & 中文
I help local buyers and cross-border buyers from Singapore with new and subsale property. Every figure in these guides is sourced; when a rule changes, I update the page and date it.
Stuck on this step? Ask me directly
Send me your situation — new or subsale, budget, state, and where you are in the process — and I will tell you what to do next and what to watch for.
I will prepare a free side-by-side cash requirement at 70% and at 90% so you know where you stand before making an offer.
Louis Koh · 11 years in Malaysian property · +60 10-906 6685 · replies 9am–10pm MYT