If Bank Negara Malaysia (BNM) decides to impose 80% Loan to Value Ratio (LVR) for home loans mainly to so-called prevent speculation on property prices and the risk of potential property bubble, does it workable? What is your point of view about the policy?
Impact on Own Stay / First House Buyers
The policy of 80% maximum property loan margin is unfair for the first time homebuyer. In order to control the property prices not being over speculated, the genuine homebuyer has become victim under the policy because they buy it for their own stay, not for speculation. It increases their burden further.
Generally, banks are offering 10:90 housing loan packages all the while for residential properties in Malaysia subject to their approval. But now property purchasers will have to pay higher down payment under the new policy.
For instance, you will need to fork out RM60,000 as 20% down payment for a double storey terrace house priced at RM300,000 instead of RM30,000 (10% down payment).
10:90 Housing Loan
Down Payment = RM 30,000
Loan Amount = RM 270,000
20:80 Housing Loan
Down Payment = RM 60,000
Loan Amount = RM 240,000
However, for the long-term consideration, I do support the move of lowering the LVR to 80% to promote healthier property market so that both buyer and bank are able to minimize the impact during economic crisis.