No Standard SPA and Mortgage Financing Package For Buying SoHo Unit in Malaysia

If you are buying SoHo unit in Malaysia, most of the bankers treat it as a commercial property. Therefore, the housing loan interest rate for your mortgage financing package will be using commercial rate, which is about BLR – 1.5% instead of BLR – 1.8% for residential properties.

Bear in mind, the margin of finance (MOF) for commercial property loans are usually lower than residential loan. For instance, normally we are able to get 90% MOF for residential homes. But MOF for commercial property usually ranges from 80% to 85%.

In another words, you need to fork out more money for your down payment if buying commercial property, normally about 15% to 20% of the property selling price.

Besides, the Sales and Purchase Agreement (commonly known as SPA or S&P) for commercial property is not using neither Schedule H nor Schedule G, which is protected by Housing Development Act (HDA).

Hence, do not sign the SPA blindly, make sure you have gone through the agreement and get the clarification from your lawyer for any doubt, utilize their service.

8 thoughts on “No Standard SPA and Mortgage Financing Package For Buying SoHo Unit in Malaysia”

  1. kahwai

    Thanks for ur info..:)

    • Horlic Lim

      @Kahwai, you are welcome!

  2. Kris


    One of the problems are also that usually for new developments, the developers already fixed the lawyer to use. commercial property loans include condominium built on commercial land title?


    • Horlic Lim

      condominium built on commercial land is normally defined as serviced apartment. Its under residential property loan.

  3. ryan

    nice article.i always learn inform fron u site

  4. kris

    Thanks for the article.

    In Malaysia, house buyers are usually not well adequately protected by law. T.T

    So always be cautious and sharp.

  5. Michelle

    Thanks for info. So is SOHO under HDA or not? Some developers say its commercial, some developer say it falls under Sch H, and some say they are exempted. What is your view?

  6. mau

    Hi Horlic, I’m one of the buyers who has right in the case of buying a soho without standard schedule. In fact, what is the defferent with Schdule H, G n non standard? any disadvantage to the buyers? N now I’m in the mist of finding out whe…ther this developer has got the waiver from HDA. Now we are faving late delivery of key. after VP since dec 2011, until now , I still cant collect keys and there is no black n white telling us when.PLs Advise.