Further to Bank Negara Malaysia’s (BNM) announcement on the implementation of a maximum loan-to-value (LTV) ratio of 70%, which will be applicable to the third house financing facility taken out by a borrower, effective from 3 November 2010, it is understand that the banks have already received the BNM’s detailed policies and guidelines on the 70 percent housing loan limit.

It is learnt that the 70% third housing loan margin is only affecting the nature individuals (not company) who are currently having two outstanding mortgage loans and intend to take on the third loan. The BNM ruling is also applicable to any loan applications by joint purchasers/borrowers, if anyone of the purchasers/borrowers has two outstanding mortgage loans. For example, Mr A & Ms B have jointly purchased a new house and applied for a bank loan together. If Mr A has two existing outstanding mortgage loans, the new loan is only entitled to a maximum of 70% margin.

However, the BNM ruling is not applicable to a loan to be taken out by a company (Sdn Bhd or Bhd). This may open up a loophole for escaping from the 70% loan cap.

For loans which was fully settled or repaid, those loans will not be taken into the count. Say, if a person has two bank loans and one of which was fully settled, he is not subject to the 70% loan limit if he intends to take on a new housing loan.

BNM ruling is only governing the banks lending policies. Even if a person is having a total of five properties but without any outstanding bank loans, he is not subject to the 70 percent margin of financing limit if he were to purchase the 6th property and financed by a bank loan. This loan is considered as the first mortgage loan.

As long as the loan is for residential house or apartment, including serviced apartments, it is subject to the BNM ruling of 70% loan cap.


  1. Just wanted some clarification. In the example above, an owner of 5 properties with no outstanding loan taking a loan now will be considered as taking the first loan. This loan and the next (2nd) are not restricted by the 70% LTV rule. If The owner settles the 2 loans and goes for another property, is that the 3rd loan or first loan?

    What I’m wondering is, loans settled in the past do not count, only current outstanding ones do. Once current loans are settled, do they still count or do we get to “escape” the ruling? Thanks.

  2. Hi Alexander, your understanding is correct. Once the curent loans are settled and no longer appear in the BNM’s Central Credit Reference Information System (CCRIS), further new loan application will be considered as one or the first one or second. The key point is, at any time, if there are two (2) outstanding housing loans, the BNM ruling is applicable.

    What we understand that BNM CCRIS only captures existing loan facilities of a borrower. The banks are relying on CCRIS system to track credit facilities of a borrower having with other banks to make credit assesment.

    Banks can only operate under their given jurisdictions, which is lending of monies. They can only count on the number of outstanding loans a person has, but they cannot cross the line to count number of properties a person has and deny a loan because of this ground. In fact, the more properties a person has (of course if no outstanding loans), the more willing the banks would lend to him/her.

    Bank Negara Malaysia – CCRIS

  3. How true, about the willingness to lend. Thank you for the prompt clarification. Might we also deduce that refinancing an existing property is treated just the same as a new loan, since it would also be in the CCRIS? i.e a person who fully paid for 2 properties and is refinancing both, now can only get 70% for next loan, or person with 2 unsettled loans can refinance a fully paid property up to 70% max?

  4. Hi Alexander, thank you for your comment. We would suggest you to check with the bankers on the refinancing matters and how would the banks dealing with it while complying with BNM ruling. In some cases where the BNM ruling may not fully cover, it is up to the banks to deal with it diligently. Just share some of our thoughts here. Thanks.

  5. I think bankers themselves might need a little time to digest to full impact of it and to be clear on the rules. Will check with them. Thank you for sharing.

  6. hi, i’ve a question here.. if the loan was approved a day before the announcement, but the letter of offer not issue yet. In this case, the borrower who alrd more than 3 loans with bank, still effected? thank in.

  7. Hi Winnie, those transition cases may up to the banks to deal with it diligently. I understandin some banks may still offer up to 90% margin of financing for those loan applications submitted before the BNM announcement. However, the banks may set their internal cut-off date for compliance with the BNM new ruling. Meaning to say, for those offer letter dated after certain date, say after Nov 3 2010, a max of 70% loan margin may be granted. Perhaps you may need to check with your banker on the cut-off date or whether your loan margin is still at 90% unaffected by the BNM ruling.

  8. I think the banker shall provide personal loan to cover up the difference of 30% at a rate similar to the housing loan in order to create appetite for housing buyer & to boost up the property development sector

  9. Thank you for your explanation whic I think makes sense. Checks with bankers also say similar to you. However, may I enquire if there is any formal statement released by BNM regarding these detailed guidelines to avoid any uncertainties. My company is involved in proprty sector and this new rule has definitely raised a lot of question marks especially when queried by customers. If I could get my hands on an official guideline by BNM would be great. Thank you

  10. The problem is I am told by banks that even if now I immediately settle the loans for my existing 2 houses, the CCRIS will still need 2 to 3 months to be updated. So, does that mean that I need to wait for that long before any bank is willing to give me 90% loan financing for my 3rd house? Wouldn’t that be unfair to me as I can’t delay signing the sale and purchase agreement for the 3rd house? Anyway to expedite the updating of the CCRIS, let’s say within 2 weeks or so?

  11. Hi BB, based on the statements by the Deputy Finance Minister, the BNM ruling will not affect company loans. Suggest to check with bankers.

    Hi Chang. We are not able to answer to your question as we are not in banking sector. Perhaps may need to check with bankers.

    Hi Kopy, honestly, we do not have the copy of the said BNM ruling or circular. As like any other BNM guidelines or circulars, it might be intended for banks as regulatory communcations and may not disseminate to public. We also checked and searched BNM website and not found any of those.

  12. Hi,
    Just want to find out if commercial property is also taken into the count of existing loan.

    My partner is having 1 shop and 1 house (joint with me), now we are planning for buying a new house with join names. Will this be consider as 3rd house and applicable to the 70% LTV. Of couse both properties are not fully settled.

  13. Hi Kitty, as far as we understand, commercial loan is not included in the scope. BNM ruling only applicable to residential housing loans. You may call up any bankers to confirm this.

    Extract from blog above:
    “As long as the loan is for residential house or apartment, including serviced apartments, it is subject to the BNM ruling of 70% loan cap.”

  14. Hi,
    Thanks for your reply. May I know who can I confirm the rule above prior to my new house loan application?

  15. what if i have a joint home loan with brothers, and my wife has another joint home loan with her brother. and this time my wife and I want to get a home loan, is it consider 3rd loan 70% or 2ndloan (90% max)? thanks

  16. If A + B joint together buy house and apply home loan. A have 1 house with CCRIS record. B have another house also with CCRIS record. Than count as Second house for A or third House For A+B?

  17. @Low, the count of number of loans should be on individual basis, instead of household basis. So, 2nd house for A+B should be considered as 2nd loan for both. You may double check with the bankers.

  18. What if I had 2 mortgage financing but both of it is abandoned project (55% completed) good service of interest. Now intend to purchase completed prop due to existing prop abandoned. Will this 3rd application consider as 70% LTV?

    Can we appeal for 90% due to this scenario.

  19. What uf I buy 2 house earlier but abandoned (both same project). Can I escape with the LTV 70% requirement if happent to purchase 3rd one?

    CCRIS of course shows 2 HL under my name.. and banks will not allowed for 90% MOF as considering for 3rd HL already.

  20. What if I buy shop lot?If i have a loan on shop lot and a loan on condominium. is the loan on shop lot will taken into account of my 90% loan?what if i planning to buy a double storey house. Is this double storey will only get 70% loan?Please let me know as soon as possible.Thank you.

  21. Hi, just want to know if I currently have 2 housing loan under my name and haven’t be fully settled, but now planning to take commercial loan to acquired the office lot by also using my name to apply loan, will it be offered only max of 70% margin? For what i know from my banker friend, I only entitled to get max of 70% margin cause the office lot consider as my 3rd property, it makes me confusing about this policy. Can I get clarification about this issue?

  22. dont think bnm understands the market well enough. we still have foreigners who buying at will. latest one is the bkt utama 9 condo. a singaporean bought 9 units each at rm1.2mil. our bigest speculator are singaporean

  23. dont think bnm understands the market well enough. we still have foreigners who buying at will. latest one is the bkt utama 9 condo. a singaporean bought 9 units each at rm1.2mil. our bigest speculator are singaporean

  24. if A+B has owned 2 properties under 2 loans that were only under A’s name, B has not applied any loan, if A+B want to buy a new house , only B apply loan, can B get 90% loan ?

    if cannot, can B buy alone and get 90% loan ? thanks !

  25. mr a has 1 house n loan, ms b has 1 house and loan. they are going to joint name to buy a house. but loan under mr a. but banker said this way cant. if s&p 2 name, loan should be 2 name also..n force to borrow loan together. after get the detail from bank negara and informed that 2 borrower only able to get 70% loan. so force to put 1 name under s&p and 1 name for loan. i just wonder, this case is total different with what you answer above ppl’s question. pls clarify. tq

  26. Hi Shirley. Different banks may have different policies and risk management approach. At least a friend of mine obtained a bank loan from UOB Bank under 1 name to purchase a joint name property recently.

  27. Im told that this 70% loan is for the 3rd housing loan. What if the first loan is for an empty land? Which is still empty. Second is for our condo and now we want to get a grounded property and it’s falling as 3rd home loan.
    Another case, if I were to settle the land which just has another 23 months payment, can the CCRIS be Cleared fast enough? Or can the bank from which we’ve taken the loan for the land produce a temporary letter to the bank providing this loan so we can expedite the signing if the S&P n actually obtain the 90% loan?
    Please help.. I really need some advice here. Thank you.


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