KUALA LUMPUR, Jan 29 (Bernama) -- First-time house buyers are expected to enjoy 23 per cent less in monthly commitment compared to current financing schemes offered in the market with the official launch of Bank Negara Malaysia's (BNM) RM1 billion Fund for Affordable Homes initiative today.

Governor Datuk Nor Shamsiah Mohd Yunus said with a maximum 3.5 per cent financing rate per annum for houses priced up to RM150,000, the initiative had attracted more than 1,037 individuals who signed up for its financial education requirement under the Credit Counselling and Debt Management Agency (AKPK).

"Out of the total, 265 individuals voluntarily did not proceed with their plans to apply for housing loans after realising they don’t have sufficient (financial) capacity at present," she said at the launch of BNM Fund for Affodable Homes and Rumahku Portal here.

She said besides addressing the financial needs of first-time house buyers, the initative also aimed at educating them on their ability to borrow and to pay back.

"The Rumahku Portal assists prospective borrowers to understand and manage their finances effectively through simple self-assessment. 

"The target group should be aware that owning a house via loans must be based on ability to pay it back fully," she added. 

She said a 2018 study showed that most Malaysians were unable to support unexpected expenses, with 52 per cent admitting difficulties to save RM1,000 during emergency times.

"Only two per cent of the people are confident of meeting their financial obligations for at least three months if they lose their source of income," Nor Shamsiah said.

Hence, various initiatives are being taken to address the current low financial literacy levels among Malaysians.

The fund and portal were launched by Finance Minister Lim Guan Eng and Housing and Local Government Minister Zuraida Kamaruddin.

Meanwhile, Lim said so far, a total 16 applications had been received through the Rumahku Portal, which was opened on Jan 2, 2019.

Out of this, five financiang applications have been approved and 11 others are being processed.

"This is a good progress even though it has not been promoted. If there is opportunity, we will extend this fund beyond the targeted two years, depending on demand," he said. 

Lim said this initiative was one of three strategies lined up by the goverment to address home ownership problems in Malaysia.

He said BNM was also working with financial institutions to introduce new measures to help first-time house buyers with household income below RM5,000 to buy a house priced up to RM300,000.

For first-time housing loan borrowers with household income of up to RM5,000, he said the government would be allocating RM25 million to Cagamas Bhd to provide leasing guarantee to ensure the borrowers obtain higher financing including the deposit .

In addition, he said the government, in collaboration with industry players, will announce this week additional measures to address unsold housing units in Malaysia.

He said the unsold units had increased 48 per cent to 30,115 units as of the third quarter last year as compared with the same quarter in 2017.

"This reflects the continued challenges in home ownership ability as well as mismatch between housing demand and supply in the market," he said.

.As of November 2018, the total mortagage loans in Malaysia increased 7.7 per cent to RM555.5 billion, out of which 70 per cent constituted house buyers with properties priced below RM500,000.

-- BERNAMA