|Features||Malaysia Property Loans||Malaysia Property Loans|
|(Lenders in Singapore)||(Lenders in Malaysia)|
|Interest Rate:||From 3.28%||From 4.45%|
|Base Currency Option:||SGD||MYR|
|Currency Exchange Risk:||Yes||No|
|Quantum of Financing:||Up to 70%||Up to 90%|
|Financing Locations:||Johor JB, Kuala Lumpur KL, Malacca, Penang, Selangor||Countrywide|
|Property Type:||Residential / Commercial||Residential / Commercial|
|Property Type:||Completed / Under-Construction||Completed / Under-Construction|
|Purpose:||New Purchase||New Purchase / Refinancing / Cash Out|
|Bank Repayment:||Bank account in Singapore||Bank account in Malaysia|
|Eligibility:||Singapore Citizens / Singapore PRs||Malaysia Citizens / PRs / Foreigners|
|Minimum Loan:||$100,000 SGD||$100,000 MYR|
Let's review more in details on the financing options and features between a Singapore's Malaysia property loan vs Malaysia’s Malaysia Property Loan.
Interest Rate Reference
Malaysia mortgages offered here in Singapore are referenced against either the bank’s board rate or Singapore’s interbank borrowing offer rate SIBOR while mortgage rates offered in Malaysia are commonly referenced against the bank’s base rate or board rate.
Base currency for Singapore’s Malaysia home and commercial property loans are offered only in Singapore dollars (SGD) while Malaysia’s Malaysia property loans are typically only offered in base currency of ringgit (MYR).
Currency Exchange Risk
Financing your mortgage in a currency different from the base currency of your asset will entail a borrower to foreign exchange (FX) risk but is generally manageable except for instances of wide volatility FX swing. The lender reserve the right to request for a margin top up should the outstanding loan quantum exceeds the bank’s maximum lending limits.
Let’s use an example for illustration.
Example: John bought a Malaysia property at $1,000,000 MYR and takes up a Malaysia Home Loan from a lender in Singapore at LTV 70%. This is equivalent to a mortgage of $700,000 MYR.
Assuming FX conversion rate at 3.10 MYR/SGD, at point of drawdown, the loan is converted to Singapore dollars (SGD) which is equivalent to $225,806.45 SGD.
Assuming 1 year later, due to a sharp depreciation and drop in the ringgit, the MYR/SGD conversion rate drops to 3.80. The outstanding housing loan amount when converted back to MYR is now $858,064.51 MYR (for simplicity, we have excluded principal repayment deductions over the 1year period).
Assuming valuation of property remains unchanged at $1,000,000 MYR, this is equivalent to 85.80% loan-to-value ratio and exceeds the lender’s maximum lending limit of up to 70% loan-to-value ratio.
Depending on the bank’s lending policy, the borrowers may be required to top up the difference in excess of the bank’s maximum lending limits.
Quantum of Financing
Up to LTV 70% for SGD loans while lenders in Malaysia may offer up to LTV 90%.
Lenders in Singapore currently only provides mortgage finance for properties located in Johor JB, Kuala Lumpur KL, Malacca, Penang and Selangor.
Lenders in Singapore currently provides mortgage finance for both residential and commercial properties in Malaysia. Mortgage Rates for commercial property loans are charged higher from 4.85% while rates for residential home loans starts from 3.28%.
Both completed and under-construction properties can be considered for finance.
Applicable for new purchase, refinancing and/or equity cash out term loan for both investment and owner-occupied properties.
Monthly repayments deducted from your Singapore bank account opened with the lender.
Singapore Citizens and Permanent Residents.
There is minimum loan requirement of at least $100,000 SGD for Singapore’s Malaysia property finance.