Malaysia Home Loan Approval Rate Drops to 38.36%

Malaysia’s Housing Loan Approval Rate Falls to 38.36%

Getting a home loan approved is becoming more challenging for Malaysian property buyers as banks take a closer look at borrowers’ financial backgrounds. According to JLL Malaysia, the housing loan approval rate dropped to 38.36% in September 2026, below the 40%–41% range recorded between 2022 and 2025.

Banks Tighten Loan Assessments

Financial institutions are paying closer attention to income records, creditworthiness and property valuations. Self-employed individuals and gig workers may face additional difficulties if they cannot provide consistent income documentation, even when their actual earnings are sufficient to support monthly repayments.

Property Valuations Also Under Scrutiny

Banks are becoming more cautious about properties where the SPA price is significantly higher than the property’s assessed market value. High vacancy risks in certain serviced apartment developments are also influencing lending decisions, particularly in areas with an oversupply of units.

Borrowing Costs Could Add More Pressure

Bank Negara Malaysia maintained the Overnight Policy Rate (OPR) at 2.75% on 5 November 2026. However, potential interest rate increases in 2027 could raise borrowing costs and further affect buyers who depend heavily on mortgage financing.

Why It Matters

The declining approval rate highlights a growing gap between property buyers’ purchasing intentions and their ability to secure financing. Buyers may need to strengthen their financial records and assess their borrowing capacity earlier, while developers may face greater pressure to offer properties that match actual affordability and market demand.

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Article Information Source: Newswav

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