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Can retirees apply for a home loan in Malaysia?


If you are retired and looking to purchase another property by applying for a home loan in Malaysia or secure financing during your retirement, then this guide could help shed some light on what and where to seek information from. 

Can retirees apply for home loan in Malaysia

According to World Bank’s estimates, Malaysia became an ageing society (with seven percent of its population aged 65 years and over) in 2020. At the current trajectory, those 65 and above are projected to double to 14 percent by 2044 (aged nation), and to 20 per cent by 2056 (super-aged nation).

This means that Malaysia will transform from an ageing nation to an aged nation in just under 25 years. Even by global standards, Malaysia’s increase in ageing rate is rapid. Comparatively, it took France 115 years, Sweden 85 years, and the United Kingdom 45 years to achieve a similar scenario.

The year 2050 will be pivotal as there will be more Malaysians aged 65 and above than pre-working citizens aged 15 and below. Two decades after that, the country’s population is expected to decline for the first time, according to estimates by the United Nations (UN).

With the increase of life expectancy, the retirement age has also been adjusted through the years. The retirement age for government employees was increased from 55 to 56 in 2001. This was extended to 58 in 2008 and to 60 in 2012.

In fact, many can and are still serving beyond the age of 60. Government data shows 138,900 of the 5.249 million employed persons in 1982 were in the 60 to 64 age group, with those falling under this age group in 2015 were 389,600 of the 14.067 million employed persons in the country. In proportion, it has grew marginally from 2.65 per cent to 2.77 per cent in this 33-year period.

Can retirees get a home loan in Malaysia?

There have been calls to look into strategies and plans to better balance between economic growth and a better old age security system. In the meantime, if you want to purchase your first property at a later age by applying for a home loan in Malaysia, or continue to purchase properties as part of your investment plan or legacy planning, what are your options?

Phang Kar Yew, Executive Director of Harveston Group, an integrated wealth management firm in Malaysia that focuses on individuals, families and businesses, shares, “It depends on retirees’ ability to pay the home loan; whether the retiree has a lump sum savings, or a regular income. For self-funding, if the retiree can afford a huge upfront payment of 60 percent to 70 percent, then the bank will consider a 5- to 10-year housing loan.

“There are not many options if retirees go for the traditional housing loans. There’s the two-generation loan, which is a joint-loan with their next generation.”

How can retirees apply for a home loan in Malaysia?

© phongphan | 123rf
  • Have a co-borrower

Uncertainties surrounding the life expectancy, income and cash flows of retired individuals usually make financial institutions hesitant to approve home loan applications. Between an individual who is 35 years old and another who is 65, banks are most likely going to choose the former. Adding a co-borrower with a stable income and a good credit score will reduce the risk for the bank. It also increases the chances of home loan approval for a longer tenure and possibly lower interest rates.

  • Lower LTV and shorter loan tenure

A lower loan-to-value (LTV) ratio might increase your chances of getting a home loan in Malaysia. However, this means that retirees will have to pay a higher amount for the down payment. As for maximum loan tenure, it is usually 35 years or up to 70 years of age, whichever is earlier.

  • Reverse mortgage

Reverse mortgage is aimed at retirees who do not have a source of income but own a completely paid-up home. Traditional mortgages require borrowers to service the loan until it is fully repaid. For reverse mortgages, the bank pays the borrower and when the borrower dies or moves out, the house is sold. The proceeds of the sale will be used to repay the bank. Any balance will be returned to the deceased’s estate or given back to the borrower.

In December 2021, Cagamas Bhd, the national mortgage corporation, introduced a reverse mortgage scheme called Skim Saraan Bercagar (SSB). It will have an initial fund of RM100 million and be available in the Greater Klang Valley from mid-Jan 2022. Cagamas has taken a collaborative approach with its strategic partners, the Employees Provident Fund (EPF) and the Credit Counselling and Debt Management Agency (AKPK), in striving towards a common goal of increasing financing access to the elderly.

What is SSB?


  • An SSB loan allows retirees aged 55 and above to borrow against the value of their fully paid homes, and convert it into a steady monthly cash payout throughout their lifetime to supplement their retirement funds. They’ll continue to stay in their homes.
Is it open for applications?
  • Yes, it opened for applications beginning 17 January 2022.
What are the eligibility criteria for the property?


  • Residential property in Malaysia is held in borrower’s or joint borrowers’ name(s)
  • For a joint-SSB loan, joint ownership of property is required
  • Property must be owner-occupied and be the primary place of residence
  • Free from encumbrances such as mortgage and other financial liabilities
What are the eligibility criteria for the borrower?
  • Malaysian
  • 55 years old and above
  • Owner or joint owners of a residential property
  • For a joint-loan, the joint borrower can be a partner, parent, sibling, or child, subject to age limit
What is the financing rate?


  • For the pilot launch, the SSB loan offers a fixed rate financing of 5 percent per year on the outstanding loan amount and a one-time upfront recourse waiver fee of 1.75 percent on the initial property value.
  • Under a fixed rate offering, SSB offers retirees a higher monthly payout, as it is able to withstand interest rate fluctuations throughout the entire SSB loan tenure.
What are the other key features of SSB?
  • There is no repayment during the lifetime of the borrower. Repayment is only due upon the demise of the borrower or last surviving joint borrower, and there’s no recourse to the estate in the event of insufficient proceeds from the sale of the property to repay the outstanding balance of the SSB loan.
How to apply for the SSB loan?


  • Interested applicants may schedule an appointment at any of the two Employees Provident Fund (EPF) branches:
  • EPF Kuala Lumpur: Ground Floor KWSP Building, Jalan Raja Laut, 50350 Kuala Lumpur
  • EPF Petaling Jaya Services Counter: PJX-HM Shah Tower, Lot A, Ground Level, PJX-HM Shah Tower, No. 16A, Persiaran Barat, 46050 Petaling Jaya
  • The public may also visit for further info, and enquiries may be directed to [email protected].

Phang states, “It is a good scheme because it certainly addresses the current financial distress of the M40 and B40 segments. Fact is, retirees may have that piece of property but are cash poor.

READ: Income Classification in Malaysia: What is B40, M40, and T20

They don’t intend to let go of the property, and don’t have much income. So, pledging the house to refinance is one of the ways to enjoy a better retirement lifestyle, while staying in the same property until the day they are no longer around.”

  • Personal loans for government employees

Here are two personal loan options for retirees or pensioners in Malaysia.

Bank Rakyat Personal Financing-i for Pensioner (Pembiayaan Peribadi-i Pesara)
  • A floating rate Islamic personal loan for senior citizens
  • Designed for Malaysian government pensioners with low- income status
  • Must be a government pensioner not older than 65 years during the end of the financing period
  • Must earn a minimum monthly pension of RM800
  • No guarantor required
  • High financing limit of up to RM100,000 or up to 15 times an applicant’s gross monthly pension
  • Flat profit rate from as low as 4.79% p.a., with conditions
  • Repayment tenure may stretch for as long as 10 years aka adjusted for affordability
RHB Personal Financing-i for Pensioner
  • Government employees aged 40 years and above with a minimum gross pension amount of RM750 per month may apply
  • No guarantor required
  • High financing limit of up to RM100,000, with repayment tenure of up to 10 years
  • Flat rate from as low as 5.25% p.a., with conditions

For property purchases, Phang suggests that retirees should be clear on their objectives of acquiring property. “For own stay, focus on location, environment, facilities, and easy maintenance, instead of valuation or market price. If it’s for income-generating purposes, retirees can consider mature shop lot areas in the city for better and stable yield.”

Many believe that an ageing population that continues to work beyond retirement can create a positive impact on society, as they’ll be able to continue to earn and spend their earnings, which would contribute to economic activity and growth. They’ll also be self-sufficient, able to age with dignity and be in financial comfort and stability for themselves and their families.

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Disclaimer: The information is provided for general information only. Malaysia Sdn Bhd makes no representations or warranties in relation to the information, including but not limited to any representation or warranty as to the fitness for any particular purpose of the information to the fullest extent permitted by law. While every effort has been made to ensure that the information provided in this article is accurate, reliable, and complete as of the time of writing, the information provided in this article should not be relied upon to make any financial, investment, real estate or legal decisions. Additionally, the information should not substitute advice from a trained professional who can take into account your personal facts and circumstances, and we accept no liability if you use the information to form decisions.

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