PM Najib announced a project called My First Home Scheme for low-mid income class to buy their first home after work.The main concept is the government will guarantee people who have met the criteria for 10% down payment so that the applicants can get 100% amount for the buying property from 25 participant banks.

I have made some conclusions of the criteria:

1.Malaysian

2. First time to buy property in Malaysia

3.Below 35 years-old

4.Monthly income below RM3000

5.Have a stable job and with it for more than 6 months

If you’ve met all above requirements,you’re entitled to buy a house from RM100,000 to RM220,000 with 100% loan up to 30 years.However,another detail added recently is the monthly instalment could not over one-third of monthly income.

I did a simple calculation for the maximum price of property if having monthly income RM3,000 which is the upper line to meet one of all criteria.Easier for calculation,I adopt the latest BLR by 30 March 2011(6.3%),the best interest rate offered in the local banks(which I know=BLR-2.4%) and it’s fixed rate,for maximum years(30 years).

Assumed the principle of the loan is X.

X+X*(6.3%-2.4%)*30=1000*12*30

X=165898

That means you only could buy a house below RM165,898 if you get a loan with assumed rate and period.

In fact,I support the new rule of 1/3 of monthly income because that could help Bank Negara control bad debt rate and size of family debts in Malaysia,also it could prevent the cases of bankruptcy of individuals.

Some people may say that RM160,000 can’t buy some nice houses.I agree with that,but I also think people are better not to do things out of their own abilities.If you could earn more money,you can buy a better house later;if your income is not so much,you may consider to rent a house or buy a small house which just fit your own needs.

Buy a house,within its means.