Ever wondered why a RM500,000 home loan ends up costing RM1 million by the time it’s fully paid off? Crazy, right? But here’s the reality many Malaysians face when it comes to buying a house.
Most people think taking a home loan is a trap. Whether it’s conventional or Islamic financing, the concern is the same: “I’m paying double the house price. Is it worth it?” And honestly… yes, it seems insane.
Here’s the truth: buying a home cash upfront is nearly impossible for most people. Even for a small studio apartment costing RM300,000–RM400,000, very few can pay in full. The top 1% maybe, but for the rest of us, loans are necessary.
Now, I’m not here to debate Islamic rulings on financing—I'm not a religious scholar. But there are established fatwas and guidance from experts that allow Islamic financing. If you want, check my YouTube channel for a full discussion on Islamic home financing with Dr. Adam Zubair.
Let’s Get Real About Home Loans 💡
Here’s a simple example:
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Home price: RM500,000
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Loan term: 35 years
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Interest/profit rate: 4.5%
Without any strategy, your monthly payment will be around RM2,366, and your total payment over 35 years? RM993,837. Yep, almost double the loan amount.
But don’t panic! Here are 3 smart ways to reduce the total profit/interest you pay the bank:
1️⃣ Increase Your Down Payment
The bigger your down payment, the smaller your loan.
Example:
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Home price: RM500,000
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Down payment: RM50,000
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Loan amount now: RM450,000
Result: Total payment drops from RM993,000 to RM894,000. Monthly payment? Around RM2,100. ✅ Less loan = less interest = more savings.
2️⃣ Shorten Your Loan Term
Instead of 35 years, try 30 years.
Result: Total payment drops to RM912,000. Monthly payment rises a bit, but you save ~RM80,000 in total! 🤑
3️⃣ Make Extra Monthly Payments
Paying just a little extra each month can save you years of payments.
Example:
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Normal payment: RM2,300
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Extra top-up: RM300
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Total payment drops from RM993,000 to RM865,000
💥 That’s RM128,000 saved! Plus, your loan ends 8 years earlier. Magic, right?
Key Takeaways ✅
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Buy your first property wisely. Don’t rush.
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Use calculators (like Easy Calculators on Apple or Financial Calculator on Android) to simulate your loan.
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Apply these 3 tips: higher down payment, shorter term, extra monthly payment.
By being strategic, you can save hundreds of thousands and free yourself from paying your home loan until retirement.
Bonus Tip to Grow Your Money While You Pay Your Loan 💰
Hey! I’ve been using this wealth management app called Versa to grow my money while managing my finances smartly. It’s super easy to use, and all products are managed by experts at AHAM Asset Management Berhad.
You can try it too! Sign up with my link and get RM10 reward after completing these steps:
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Download: https://download.versa.com.my/1bAf/referral?deep_link_value=UAVR6K5X
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Sign up with my referral code: UAVR6K5X
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Complete the onboarding steps.
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Make your first cash-in of at least RM100 into any Versa product.
💡 Start growing your money today while paying off your home smarter!
