When you buy a "New Launch" or "Under Construction" condo in Malaysia, you don't pay the full loan installment immediately. Instead, you pay according to the Progressive Payment Schedule.
This schedule is regulated under Schedule H of the Housing Development (Control and Licensing) Act (HDA).
How It Works
The developer claims money from your bank in stages, as they complete construction milestones.
- Stage 1: Signing SPA (10% paid by you as downpayment).
- Stage 2a: Piling & Foundation (10%).
- Stage 2b: Structural Framework (15%). ...and so on until Vacant Possession.
The Schedule (Simplified)
| Stage | Milestone | % of Price | Cumulative % |
|---|---|---|---|
| 1 | Signing SPA | 10% | 10% |
| 2a | Work below ground level (Piling) | 10% | 20% |
| 2b | Structural Compliance (Frame) | 15% | 35% |
| 2c | Walls, Doors, Window Frames | 10% | 45% |
| 2d | Roofing / Ceiling / Wiring | 10% | 55% |
| 2e | Internal Plastering | 2.5% | 57.5% |
| 2f | Sewerage Works | 5% | 62.5% |
| 2g | Drains | 5% | 67.5% |
| 2h | Roads | 5% | 72.5% |
| 3 | Vacant Possession (Keys) | 17.5% | 90% |
| 4 | Final Title Transfer | 10% | 100% |
Note: The remaining 5% is usually held by lawyers as stakeholding for the Defect Liability Period.
Progressive Interest
Since the bank releases money in stages, you only pay interest on the amount released so far. This is called Progressive Interest.
- Year 1: You might only pay RM100-RM300/month (since only ~10-20% is released).
- Year 3: As the building nears completion (70-80% released), you might pay RM1,500/month.
- Completion: You pay the full installment (e.g., RM2,500/month).
Why Is This Good?
- Easier Cash Flow: You don't have the burden of full rental + full mortgage at the same time while waiting for the house to be built.
- Safety: The developer only gets paid if they actually do the work.
Check New Projects
Looking for new launch properties with progressive payment schemes?
