I have a question. With certain amount of monthly salary, what kind of house can one afford to buy?
For example, if monthly salary is RM2500 = house worth RM100k and below. or cant afford at all.

1. RM2500 - RM3000 : ?
2. RM3001 - RM4000 : ?
3. RM4001 - RM5000 : ?
5. RM5001 - RM6000 : ?
4. RM50,000 - RM60,000 : ?


Thank you for your help. =)

divide ur monthly income by 4, tht amount is the amount u can afford for monthly instalment.

Oh okay. Thanks. And what kind of installments are there? I mean, for how many years?

u r really expecting to be spoonfed, aren't you? ok, i'll humour you.

take your gross pay/salary and for individual income, divide by 3. if you are a couple, then both salary combined and divide by 2. (not sure why bro yk quoted divide by 4, i could be outdated).
eg. u earn rm3600 per month. thus you are able to finance installment of rm3600/3=rm1200. be careful though, if you have fixed commitment such as car, then it (rm3600-fixed installments)/3.

once you established that, go check through rm1200 or whatever figure you come up with against a bank loan slip or try using some financial calculator. this number is fixed and it really depends on how long a loan you want.
eg. this is based on assumption and not true at all but just for illustration purpose. say rm1200 permits you to take 250k loan for 25 years, it might be the same for 200k for 30 years or it might be rm100k for 10 years.

so bottom line, rm1200 is the max installment you can go for and it's up to you to either max your loan or max your tenure. most banks allows borrowing up to your age of 65 years or 40 years loan tenure nowadays.

good luck!

i know how to do the calculations. -___-"

what i wanted to know was that how long can a person take a loan. i mean like a car, there are 3 year, 5 year and 9 year loans.
but yeah, thanks for the explanation.

It depends on your lifestyle, and of course the faster you settle your loan, the less interest to be eaten by the bank.

the reason why i put divided by 4 is bcoz /3 is leveraging a person's income, nowadays even when u r paying instalment for house, u may still have to pay for maintenence fees for condo and guarded n gated community, plus yearly assessment fees and fire insurance.

so I came up my own version of /4 is safer than /3, knowing that TS is new, it's better for him to take more conservative ways in committing a loan.

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Added on March 1, 2010, 2:23 amnormally is 15-30yrs depends on ur age. min i think is 5yrs , havent seen anyone does tht yet.
some banks offer package for graduate at 40yrs tenure. however, the sooner u pay off, more interest u save.

This post has been edited by yewkhuay: Mar 1 2010, 02:23 AM

it very much depends on how much you can afford to pay for the loan per month. Usually that would be 1/3 of your salary + any other commitments that you have.

For example if your salary is 3K+ the monthly repayment ideally for you is RM 1K. For RM 1K assuming the rate you get is BLR -1.9% and the property price is 220K the period would for the loan would be 30 years .

As a matter of fact you easily get these figure from most property websites. they have a home loan financial tool embedded on their websites.

Hope this helps. Do check out iproperty.com for the financial calculator tool

dude what kinda house r u looking for?

How long depends on how much can they pay every month. So far i know it can reach 50 years

50 yrs is crazy... who knows ur still able to work 50 yrs from now...
i don't mean health..but job wise...u see nowadays ppl can kena fire just like that ....

wonder how the bank can loan up to 50 yrs....

1. RM2500 - RM3000 : 200k
2. RM3001 - RM4000 : 250k
3. RM4001 - RM5000 : 300k
5. RM5001 - RM6000 : 350k
4. RM50,000 - RM60,000 : max loan up to 5mil

my simple method without complicated calculations :

--> Every RM1200 salary == RM100,000 loan.

thanks Pai.. Something that I use as a rule of thumb too..
Every RM100k loan, takes about 6%/12 = 0.5% as monthly installment for 30y loan with good package.

That gives every RM100k about RM500 installment per month. putting them together, RM500 / RM 1200, gives about 42% ratio, some says 1/3, some says higher, but rule of thumb la.

edited...

This post has been edited by arthurlwf: Mar 1 2010, 06:19 PM

its a quick n dirty method, so by no means it will 100% accurate.

Public Bank offer 40 years tenure
call 0195205511 if you are interested