Over 16,000 Malaysians have experienced PropertyGuru’s Home Affordability Tool proving that consumers are eager to discover if they are credit worthy enough to secure a bank loan and purchase a home. Given the lack of complimentary, quick and easy tools for the public, PropertyGuru’s free-of-charge loan assessment calculator has received strong public support with consumers being able to find out their debt servicing ratio (DSR), their maximum home loan eligibility and thus what price of home that most Malaysians could realistically afford. Linked to the Credit Tip Off Service (CTOS) system, PropertyGuru’s Home Affordability Tool just requires prospective buyers to key in their personal details to retrieve their DSR.
According to statistics released by PropertyGuru, the majority of consumers are in the dark about their loan eligibility ratio. Most have a rough idea while others just apply and hope for the best. The end result is high loan rejection rates and plenty of frustration and disappointment among buyers and sellers too, which has become endemic of the local property market. Worse, some may even obtain loans which they may have difficulty servicing which could lead to financial issues and property foreclosure.
Presently, loan rejection rates vary with the real estate housing developers association putting the number as high as 60% while Bank Negara Malaysia states that the situation is progressively improving with rejection rates for 2017 reported at 23.1%. PropertyGuru Malaysia Country Manager, Sheldon Fernandez says that of those who used the tool, their loan eligibility matches PropertyGuru’s Consumer Sentiment Survey findings that show Malaysians are typically looking at home loan principal sums of between RM300,000-RM500,000.
“The median point is about RM400,000 to RM450,000 for maximum loan amount. Most who checked their credit score have a healthy DSR of below 50%. But beyond this, HAT re-orientates people’s mindsets so they view their credit worthiness from the perspective of banks rather than relying on their personal assumptions. Most people have a vague idea of what they can afford and proceed to buy a property only to be disappointed when they can’t secure financing. PropertyGuru’s Home Affordability Tool (HAT) helps people set more realistic targets of what they can afford. With this, we hope more Malaysians can be better equipped to buy their dream homes,” says Fernandez.
PropertyGuru’s Home Affordability Tool is available on a complimentary basis for all who visit propertyguru.com.my. It is the first-ever online loan eligibility solution in Malaysia and is developed in collaboration with MHub – a real estate fintech platform that helps qualified buyers to get their homes – and powered by CTOS – Malaysia’s leading credit reporting agency.