How does this mortgage work?
Bank Islam Baiti Home Financing is based on the principle of Tawarruq (Commodity Murabahah). Tawarruq defines the purchase of an asset with a deferred price, and then selling that asset to a third party to get cash.
Subject to credit check and approval, Bank Islam will be able to finance up to 90% of the value of your new house, whether complete or under construction.
Here are the rates and the eligible property value for your reference.
Property Value | Profit Rate |
RM300,000 and below | Standardised Base Rate (SBR) 3.00% p.a. + 1.10% p.a. = 4.10% p.a. effective profit rate |
Above RM300,000 | Standardised Base Rate (SBR) 3.00% p.a. + 0.90% p.a. = 3.90% p.a. effective profit rate |
What are my monthly commitments?
Your monthly instalments will consist of the principal amount and profit rate, which is floating. The implication is that your monthly instalment amount will vary if the bank's Base Rate changes.
Thankfully, the profit rate is capped to a limit so that you can hedge any sudden hikes in the Islamic Base Rate that might result in higher repayments. Bank Islam also offers a fixed multi-tier home loan in this financing package.
You can enjoy a low-interest rate for the first year, increasing incrementally for subsequent years. Be reminded that if you are unable to service your repayments, it would be wise to contact Bank Islam to negotiate an alternative for payments and avoid foreclosure.
Do I need any house Takaful coverage?
You must take up the Mortgage Reducing Term Takaful (MRTT) or the Mortgage Level Term Takaful (MLTT) should the unexpected occur, resulting in you being incapable of servicing your home instalments. Takaful coverage will also have your back in the event of your death or Total Permanent Disability (TPD).
You also have the option to subscribe to a Houseowner/Householder Takaful Plan if required. Bank Islam should be able to assist you with this if you need further details.
What documents do I need to make a home loan application?
Salaried employee:
- NRIC photocopy
- Sales and Purchase Agreement
- Latest 3 months salary slips
- Latest 3 months salary crediting account statements
- Employer's confirmation letter
- Annual income statement/ BE form/ EPF statement
- Any other supporting income document
Self-employed:
- NRIC photocopy
- Company/ Business registration
- Latest 6 months bank statement
- Latest 3 years financial statement
- Latest B Form
- Any other supporting income document