1. What is Home Loan Eligibility?

The home loan eligibility calculator determines the maximum loan amount (principal) you can borrow based on your affordable monthly payment, interest rate, and loan term. This helps you understand your borrowing capacity with Malaysian banks.

2. How Does the Calculator Work?

The calculator uses the loan eligibility formula:

Where:

• \( P \) — Maximum loan amount (principal)
• \( PMT \) — Affordable monthly payment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Total number of payments (term in years × 12)

Explanation: The formula calculates the present value of an annuity (the loan amount) based on regular payments, interest rate, and duration.

3. Importance of Loan Eligibility Calculation

Details: Knowing your maximum loan eligibility helps in financial planning, property selection, and mortgage applications with Malaysian banks like Maybank, CIMB, or Public Bank.

4. Using the Calculator

Tips: Enter your comfortable monthly payment, current interest rate (default is Maybank's 2.88% p.a.), and desired loan term (typically 20-35 years).

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate in Malaysia?
A: Rates vary by bank and market conditions, typically ranging from 2.8% to 4.5% p.a. for residential properties.

Q2: How does loan term affect eligibility?
A: Longer terms increase eligibility (lower monthly payments) but result in higher total interest paid.

Q3: What other factors affect actual loan approval?
A: Banks also consider credit score, income stability, debt-to-income ratio, and property value.

Q4: Is this calculator accurate for all banks?
A: While the formula is standard, individual banks may have different eligibility criteria or processing fees.

Q5: Should I borrow the maximum eligible amount?
A: Not necessarily. Consider future financial commitments and potential interest rate increases.