Finance Minister Lim Guan Eng expects home loan approvals for first-time homebuyers to increase by at least 20 percent, following the easing of eligibility requirements for Bank Negara Malaysia’s RM1 billion Fund for Affordable Homes.

“We hope it will be easier for homebuyers to obtain a loan. If monthly repayment is reduced by 20 percent, more people will be able to purchase a home and I expect this will lead to a similar 20 percent increase in homeownership,” said Lim after the Budget 2020 focus group meeting.

“But it also depends on the individual or household financial position.”

He noted that the fund’s extended repayment duration of 40 years, from 30 years previously, will help reduce the monthly housing loan repayments of first-time homebuyers by 20 percent, reported Edge Prop.

Starting 1 September, the maximum monthly household income for applicants to the fund will be RM4,360, up from RM2,300 previously.

The central bank has also raised the maximum property price to RM300,000 from RM150,000.

Aside from these, successful applicants are also set to enjoy a low interest rate of 3.5 percent per annum with a 40-year repayment duration. They will also be exempted from stamp duty for their sales and purchase agreement as well as their financing agreement.