Home loans in Malaysia categorized into three main types
1. Term Loans: These are the most common type of home loans in Malaysia. With a term loan, you borrow a specific amount of money and repay it over a fixed period, usually up to 35 years. Your monthly payments typically include both the principal amount and interest.
2. Flexi Loans: Flexi loans offer more flexibility in terms of repayment. You can deposit extra money into a linked current or savings account, which reduces the outstanding loan amount and subsequently lowers the interest you pay. You can also withdraw these funds when needed, making it a versatile option.
3. Islamic Home Financing: For those who prefer Shariah-compliant financing, Islamic home financing options are available. These follow Islamic principles such as not charging or paying interest. Instead, they involve profit-sharing or a buy-and-sell arrangement, such as the Musharakah Mutanaqisah or Bai Bithaman Ajil (BBA) concepts.
Each of these categories has its own advantages and considerations, so it’s essential to understand them thoroughly and choose the one that best suits your financial needs and preferences.