How does this mortgage work?
Bank Islam Baiti Home Financing-i is based on the principle of Tawarruq and it is intended for new houses that are still in construction or already completed. It defines the purchase of an asset with a deferred price and then sells that asset to a third party to get cash.
Subject to credit check and approval, Bank Islam may finance up to 90% of the value of your new house, excluding:
- Mortgage Reducing Term Takaful (MRTT) / Mortgage Level Term Takaful (MLTT) – (compulsory)
- Houseowner/Householder Takaful Plan (if applicable)
- Stamp Duty
- Legal fees
- Valuation fees
This Islamic mortgage also features (1) no lock-in period, (2) no compounding elements, (3) no processing fee and (4) no penalty for early settlement.
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 the fees that I should know?
According to Bank Islam, here are the fees that you should take note of:
- Request for EPF withdrawal (manual application): RM20 per request
- Request for EPF withdrawal (online application): RM10 per request
- Custodian fee for safekeeping of Security Documents for the fully settled facility: RM80 annually
- Request for Redemption Statement: RM50 per request
- Request for a copy of Security Documents: RM50 per request
- Takaful Contribution: As per the contribution amount required by the Takaful Operators to cover the whole outstanding financing amount in the event of death and TPD of the customer
- Legal fees on securities documentation: Legal fees and incidental expenses related in connection with the facility
- Valuation fees: Applicable for completed property or own construction of property by the appointed contractor
- Stamp Duty: As per the Stamp Duty Act 1949 (Revised 1989)
- Disbursement fee: Include fees for registration of charge and other related charges
- Cancellation of the Facility: All costs (if any) for the preparation and registration of securities documents that have been incurred by the Bank in connection with the facility including the expenses incurred during the claim process in the facility cancelled
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.
However, do note 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.
Am I eligible to apply?
You are eligible to apply for Bank Islam Baiti Home Financing-i if:
- You are a Malaysian citizen
- Aged 18 years old and above
- Not bankrupt or have any legal actions
- Employed or own a business of at least 3 years
- Minimum 1 year's worth of good payment track record
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
- Sales and Purchase Agreement
- Company/ Business registration
- Latest 6 months bank statement
- Latest 3 years' financial statement
- Latest B Form
- Any other supporting income document
