Hi Pinkdevil,

It is possible. This kind of arrangement is "balloon payment" whereby the monthly installment can be halved. For instance, 40 yrs of tenure, 500k loan, monthly installment should be . But with balloon payment, the installment will be almost halved, for instance, . The only problem (or you might consider it to be an "advantage" but for us as financial consultant, this is an "arrangement") with this kind of arrangement is that, with monthly installment being reduced drastically, the unpaid interest and principal will be accumulated and deferred to the last month of the tenure, for instance 200k. When the time comes, you can several options, (i) settle the remaining balance with cash /EPF (it will dry you up, if you are not rich), (ii) refinance it and lengthen your tenure (since you are old by that time, this will transfer to your kid and your kid will bear it). Maybank is well-known in doing this (or, you can say Maybank is "doing well" in this). Think twice when you plan to have this kind of arrangement, there is no such thing of "being so good" arrangement in mortgage. It is either you need this kind of arrangement or not. Most of the time, this arrangement is suitable for 2 kinds of buyers, (1) insufficient cash flow during a short of period of time, when they have sufficient money, they will move on to normal payment mortgage; (2) investor, reduce monthly commitment, can buy more properties, the last payment will not affect or burden them since they are going to sell the properties off. Normal home buyer is not advised to get this kind of mortgage when you consider the consequences of the last payment.

MOF can be 90%~95% if your condo location is prime, hot zone; individual strata title; built by reputable developer. It can go up to 95% ~100% when it includes the financing of legal fee and valuation fee.

Let us know if you do need help on this.

Hi Pinkdevil,

It is estimated that on 20th ~25th year, you will start to service a significant portion of your principle for a loan tenure of 30 yrs. This is mainly due to the fact that when you halved your monthly installment, the unpaid interest will go into your loan account as well, thus, greater sum of interest deferred will roll big when the time move on. Consider the interest on interest is stacking up. it will take around 60~70% of your tenure to have significant portion of your monthly installment goes into your principle. Unless your house's appreciation is higher than interest accumulated at a constant speed and constant rate, there will be no equity in your property. With this kind of arrangement, you will need to resale or refinance your property / restructure your mortgage within 1~2 yrs (if you are financially wise). Going beyond that, it will result in (1) your property appreciation is highly threatened by the interest accumulated / deferred within the loan, and (2) your purchase will turn out to be a speculation instead of a promising investment, in return, it will only improve your cash position throughout your tenure. Basically, it won't affect your second purchase as long as your income and financial position is good enough (and, you must be able to show that black and white).

Hi pinkdevil,

Basically, judging based on the description given by you, I don't think the 1st purchase is going to affect your chance in getting the second house, provided that (1) you do the complete set of "paper work", and (2) your overall commitment does not breach the baseline of the bank.

Not sure what did you mean by "borrow 500k loan by using the 300k loan". I would assume that you meant that you purchase a house which worth 500k but only borrow 300k to finance your purchase, tenure 40 yrs. Consider 4.1% of interest, your normal monthly installment should be 1.2k. Assuming the arrangement of balloon payment reduce the installment to 0.6k, this is the number that will show up in the CCRIS. Consider you are able to rent the unit out at 0.6k, with a proper documentation of tenancy agreement (with LHDN stamp), you can show to the bank that you have a source of income that is able to mitigate the impact of the 1st property's commitment. Thus, your position is exactly the same as "you are having no mortgage commitment at all". Tenancy income will help you as well, thus, proper documentation is essential. With this, you can go for the second house and have a better chance in getting a better termed loan.

Let me know if you need any help in getting a loan.