Renovation Loan in Malaysia 2026: Rates and How to Apply
Property Lab editorial teamPublished 11 min read
Key points
- In Malaysia, RHB's My1 Renovation Loan (October 2026) lends from RM50,000 for 5 to 35 years, capped at 30% of the property value and paid to the contractor in stages.
- A 7.88% flat-rate personal loan in Malaysia equals an effective 13.93% a year, and Bank Negara bans flat-rate personal financing from 1 January 2027.
- EPF Akaun Sejahtera in Malaysia has no renovation withdrawal as at October 2026, but civil servants can use LPPSA Jenis 7 renovation financing at a 4% fixed rate.
Contents
- What are the ways to pay for a renovation in Malaysia?
- How does a bank renovation loan work?
- Renovation loan interest rates in Malaysia (October 2026)
- Flat rate vs effective rate: a worked example
- Can you top up or refinance your home loan for renovation?
- Can civil servants get LPPSA renovation financing?
- Can you withdraw EPF Akaun Sejahtera for renovation?
- Do you need council or management approval to renovate?
- How to apply for a renovation loan
- Frequently Asked Questions
- References
A renovation loan in Malaysia is usually extra financing added to a home loan, secured on your house and paid to your contractor in stages, with a floating rate like a home loan. Alternatives are a home loan top-up or refinance, a flat-rate personal loan, LPPSA Jenis 7 for civil servants, or savings. EPF Akaun Sejahtera does not list renovation as a withdrawal purpose.
RHB's My1 Renovation Loan starts at RM50,000, runs 5 to 35 years and is capped at 30% of the property value. Personal loans need no collateral but cost more: CIMB's 7.88% flat rate equals 13.93% a year on a reducing balance.
From 1 January 2027, Bank Negara bans flat-rate personal financing, and renovation top-ups stay outside its 10-year personal financing cap.
Key numbers (as at October 2026)
- RHB renovation minimumRM50,000
- RHB cap on property value30%
- CIMB 7.88% flat, effective13.93%
- LPPSA renovation rate4.00% fixed
- Personal financing max10 years
- Flat-rate loan ban from1 Jan 2027
Also called: pinjaman renovasi rumah, pinjaman or pembiayaan pengubahsuaian (renovation loan or financing), renovation financing-i (Islamic), LPPSA Jenis 7 (ubah suai), PBT (pihak berkuasa tempatan, local council).
What are the ways to pay for a renovation in Malaysia?
This guide compares five ways to fund a renovation in Malaysia in 2026: a bank renovation loan, a top-up or refinance of the home loan, a personal loan, LPPSA financing for civil servants, or savings.
| Option | Typical amount | Tenure | Rate type | Notes |
|---|---|---|---|---|
| Renovation loan | From RM50,000 | 5–35 years | Floating | Pays contractor |
| Top-up/refinance | Bank margin | To 35 years | Floating | Legal fees |
| Personal loan | Up to RM250,000 | 2–7 years | Flat | No collateral |
| LPPSA Jenis 7 | By income | To 35 years | Fixed | Civil servants |
| EPF Sejahtera | Not listed | Not a loan | No interest | Housing only |
From the lender and KWSP pages in the References; each lender sets its own limits.
How does a bank renovation loan work?
RHB's FAQ calls a renovation loan an additional amount tied to a home loan that part-finances work on the property. Its My1 Renovation Loan terms, read on 28 October 2026:
- Amount: from RM50,000. Landed homes: the lower of 80% of the quotation or 30% of the property value. High-rise: the lowest of 60% of the quotation, 30% of the value or RM250,000.
- Tenure and age: 5 to 35 years, ending by age 70; applicants 18 or older with a first or second housing loan.
- Total margin: up to 120% with the home loan. On an RM800,000 house, RHB shows a RM720,000 home loan plus up to RM240,000 for renovation.
- Payment: in stages against completed work, to one Sdn. Bhd. contractor with a clean CTOS record, within 12 months (18 at most).
- Not covered: movable furniture, appliances and demolishing the whole building.
For a RM100,000 quotation on a RM500,000 home, those caps allow at most RM80,000 for a landed house or RM60,000 for a condo, so you fund the rest yourself. RHB's pages disagree on the minimum property value: RM300,000 nationwide on the conventional page and FAQ, but RM500,000 in the Klang Valley, Johor Bahru and Penang Island on the Islamic page.
AFFIN Bank launched a similar product, AFFIN Home Reno/-i, in January 2026. RinggitPlus reported in July 2026 that it covers interior and exterior works on homes valued from RM150,000, up to 120% of the value. Confirm the terms with AFFIN.
Renovation loan interest rates in Malaysia (October 2026)
Among the Malaysian banks checked in October 2026, secured renovation and home loans float with the standardised base rate (SBR), which equals the 2.75% OPR, while personal loans quote a flat rate.
| Bank | Product | Rate | As at |
|---|---|---|---|
| RHB | My1 Renovation Loan | Floating (SBR) | 31 Dec 2025 |
| Public Bank | MORE Plan | 4.10% (example) | Oct 2026 |
| CIMB | Cash Plus Personal Loan | 4.38%–19.88% flat | Oct 2026 |
| Hong Leong Bank | Personal Loan | 8.50%–10.50% flat | Oct 2026 |
| LPPSA | Jenis 7 (ubah suai) | 4.00% fixed | Sept 2026 |
RHB's product disclosure sheet (PDS), valid from 31 December 2025, leaves the rate blank for the offer letter. Public Bank's 4.10% is an illustration at an SBR of 2.75% in an undated PDS, not a quote. CIMB's lowest rate is for CIMB Preferred customers, and its effective rates run from 8.08% to 31.42%; Hong Leong Bank states 15.99% to 20.76%. LPPSA charges 4.50% on any portion above RM750,000.
Flat rate vs effective rate: a worked example
A flat rate charges interest on the original loan amount for the whole term, as Bank Negara defines it, so on a 5-year loan its true yearly cost is close to double the headline rate. This illustrative example, calculated in Python, compares RM50,000 at CIMB's 7.88% flat rate with the same sum added to a home loan at the 4.10% rate in Public Bank's PDS.
| RM50,000 borrowed as | Rate | Monthly | Total interest |
|---|---|---|---|
| Personal loan, 5 years | 7.88% flat | RM1,161.67 | RM19,700.00 |
| Home loan, 5 years | 4.10% | RM923.08 | RM5,385.05 |
| Home loan, 25 years | 4.10% | RM266.69 | RM30,006.10 |
| Home loan, 35 years | 4.10% | RM224.40 | RM44,246.50 |
Illustrative only; home loan rows use a reducing balance with monthly rest. The flat rate converts to an effective 13.93% a year, matching CIMB's own figure.
A lower rate is not always cheaper: RM50,000 over 25 years at 4.10% costs RM30,006.10 in interest, more than the 5-year flat-rate loan, although the instalment is far smaller.
Can you top up or refinance your home loan for renovation?
Yes, a home loan top-up or cash-out refinance can fund a renovation in Malaysia. From 1 January 2027, Bank Negara treats extra financing above the loan being refinanced, or above the original loan amount, as personal financing with a 10-year limit. Paragraph 10.5 of the policy document exempts money used solely for renovation, and banks must verify the purpose with documents.
Public Bank markets its MORE Plan refinancing for home renovations; the PDS lists 0.5% stamp duty, no processing fee and no lock-in. Legal and valuation fees still apply, as RHB's PDS shows. Refinancing Your Home Loan in Malaysia 2026 explains the full costs.
Can civil servants get LPPSA renovation financing?
Yes: LPPSA Jenis 7 finances the renovation of a home whose purchase or construction was financed or settled through public sector housing financing, at a 4% fixed rate on a monthly reducing balance, according to the MyGOV portal (updated 13 March 2026).
Under LPPSA rules from 4 October 2026, Jenis 7 taken as a second financing can reach a 100% margin on the same property and must use the first financing's insurance or takaful panel. A second financing is for buying or renovating, not both. Some LPPSA FAQ pages still show pre-October conditions, so read the latest notice. LPPSA Home Loan 2026 covers income limits.
Can you withdraw EPF Akaun Sejahtera for renovation?
No: as at October 2026, the KWSP pages list Akaun Sejahtera housing withdrawals for buying or building a house, reducing or redeeming a housing loan, monthly instalments and the flexible housing withdrawal, and none is for renovation. The reduce-or-redeem page excludes renovation loans. Akaun Fleksibel savings can be withdrawn at any time from RM50 below age 55. Using EPF to Buy a House (Akaun Sejahtera) explains the housing options.
Do you need council or management approval to renovate?
Usually yes: landed homes need local council (PBT) approval for additions and structural work, and strata units need written management approval before any renovation.
- Landed homes: the Seremban City Council (MBS) FAQ says section 70(1) of the Street, Drainage and Building Act 1974 (Act 133) bars any structure without the council's written approval, including additions and renovations. MBS wants plans from an architect or registered draughtsman, plus a neighbour consent letter if work touches a shared boundary.
- Condos and other strata units: under by-law 27 of the Strata Management (Maintenance and Management) Regulations 2015, the owner needs the management corporation's prior written approval, which may come with a deposit and a deadline, plus any council approval. By-law 29 bans hacking or drilling within 300 mm of concealed pipes or conduits.
- The bank: RHB wants authority approvals before paying for structural work on landed homes.
How to apply for a renovation loan
RHB's requirements serve as the example.
- Get a written quotation: the loan amount is based on it, so choose a contractor the bank accepts.
- Get approvals: apply for council plan approval for landed works, or for written approval from your JMB or management corporation in a strata building.
- Check your DSR: CIMB's guide says banks divide all fixed repayments in your CCRIS report by net income, so add the new instalment first; Home Loan Eligibility in Malaysia 2026 (DSR) shows the formula.
- Compare total cost: ask each bank for the effective rate and total repayment, not only the headline rate.
- Prepare documents: for salaried applicants, RHB lists the NRIC, 3 months of payslips and salary crediting statements, the latest EPF statement and BE form; the self-employed add business registration, Form B and 6 months of statements.
- Sign the offer and loan documents: budget for stamp duty, legal fees and valuation fees.
- Draw down in stages: the bank pays the contractor as work progresses, with a post-renovation valuation before the last payment.
If an application fails, Housing Loan Rejected in Malaysia explains the common reasons and what to fix.
Frequently Asked Questions
What is the interest rate for a renovation loan in Malaysia?
RHB's secured renovation loan floats with the standardised base rate like its home loans, while CIMB and Hong Leong Bank quote personal loans from 4.38% and 8.50% flat. The offer letter gives your rate.
Can I use EPF for renovation?
Not from Akaun Sejahtera, because KWSP's housing withdrawals cover buying, building and paying down a home loan, not renovation. Members below 55 can take money from Akaun Fleksibel at any time.
Is a renovation loan better than a personal loan?
A secured renovation loan is priced off the SBR and can run for decades, but needs RM50,000 or more, legal paperwork and a company contractor, while a personal loan pays out in one sum without collateral but is much dearer on an effective basis.
What is the minimum renovation loan amount?
RHB sets RM50,000 as the smallest renovation amount it will lend. For a smaller job, look at the other options in this guide.
Can a renovation loan pay for furniture and appliances?
No. RHB and AFFIN both exclude movable furniture and appliances, and fund fixed works such as tiling, wiring and plumbing.
Do I need approval before renovating my house?
For landed houses, structural additions need the local council's written approval under Act 133. Condo owners need the management corporation's written consent first.
Can civil servants get a pinjaman renovasi rumah from LPPSA?
Yes, through LPPSA financing Jenis 7, if the house was bought or built with public sector housing financing. The rate is 4% fixed, and the term can run up to 35 years or age 90.
References
- Bank Negara Malaysia: Policy Document on Personal Financing (30 September 2025)Used for the 10-year tenure cap, the 1 January 2027 flat-rate ban, the effective rate disclosure rule and the renovation exemption for top-ups.
- Bank Negara Malaysia: Policy Document on Personal Financing (PDF)Used for the definitions of flat, fixed and floating rates and paragraphs 10.1 to 10.13.
- RHB: Home & Renovation Loan (My1 Renovation Loan)Used for the minimum amount, tenure, 30% margin, examples, eligibility and documents.
- RHB: Renovation loan/financing FAQ (PDF)Used for the quotation caps, eligible works, staged release, contractor rules and time limits.
- RHB Islamic: Home & Renovation FinancingUsed for the RM500,000 minimum property value it lists for the Klang Valley, Johor Bahru and Penang Island.
- RHB: My1 Home Loan Product Disclosure Sheet (valid from 31 December 2025)Used for the floating SBR-based rate and the stamp duty, legal and valuation fees.
- Public Bank: MORE PlanUsed for the refinancing plan marketed for home renovations.
- Public Bank: MORE Plan Product Disclosure Sheet (PDF)Used for the 4.10% example rate, the stamp duty and the absence of a processing fee or lock-in.
- CIMB: Personal loan interest ratesUsed for the Cash Plus flat and effective rates for a 5-year tenure.
- CIMB: Cash Plus Personal LoanUsed for the RM2,000 to RM100,000 amount, tenure, age and income rules.
- CIMB: Understanding DSR in MalaysiaUsed for the DSR formula and the debts banks count.
- Hong Leong Bank: Personal LoanUsed for the flat and effective rates, RM5,000 to RM250,000 amounts and 2 to 5-year tenure.
- MyGOV: Pembiayaan Perumahan Sektor Awam (updated 13 March 2026)Used for the seven LPPSA financing types, Jenis 7, the 4% fixed rate and tenure (in Malay).
- LPPSA: Notis Makluman on 2026 improvements (September 2026, PDF)Used for the 4 October 2026 rules, the 4.50% rate above RM750,000 and Jenis 7 as a second financing.
- LPPSA MyFinancing: FAQ on second financingUsed for the 100% margin and the same insurance or takaful panel for Jenis 7.
- LPPSA MyFinancing: FAQ on first and second financingUsed for the rule that a second financing is for buying or renovating, not both.
- KWSP: Housing withdrawalsUsed for the list of housing withdrawal types (read in a browser on 20 October 2026; the site blocks automated checks).
- KWSP: Reduce or redeem housing loanUsed for the exclusion of loans to renovate, repair or add works to an existing house (re-read in a browser on 28 October 2026).
- KWSP: Akaun Fleksibel withdrawalUsed for withdrawals at any time from RM50 below age 55 (read in a browser on 20 October 2026).
- Seremban City Council (MBS): Can I build a structure without approval from the PBT?Used for section 70(1) of Act 133 and renovations without approval.
- MBS: Building plan approval for additions and renovation of housesUsed for submission by an architect or draughtsman and the neighbour consent letter (in Malay).
- Strata Management (Maintenance and Management) Regulations 2015, P.U. (A) 107/2015 (DBKL copy)Used for by-laws 27 to 29 on renovation in strata parcels.
- RinggitPlus: AFFIN and IKEA offer financing for renovations and furnishing (6 July 2026)Used for AFFIN Home Reno/-i terms (news report, not the bank's page).
- EdgeProp: AFFIN Bank launches home loans up to 120% to cover renovations (16 January 2026)Used for the January 2026 launch.
Bank rates and LPPSA and KWSP rules change, so check the latest official pages and your offer letter before you rely on a figure.
General information only, not legal or financial advice. Banks decide each application under their own credit policy; speak to your bank, LPPSA, KWSP or a licensed adviser about your situation.
Sources
- Policy Document on Personal Financing — Bank Negara Malaysia
- Home & Renovation Loan (My1 Renovation Loan) — RHB Bank
- Renovation Loan/Financing FAQ — RHB Bank
- Pembiayaan Perumahan Sektor Awam — MyGOV (Government of Malaysia)
- Notis Makluman: Penambahbaikan Kemudahan Pembiayaan Perumahan Sektor Awam 2026 — LPPSA
- Can I build a structure without an approval from the PBT first? — Seremban City Council (MBS)
- Cash Plus Personal Loan interest rates — CIMB Bank
General information only, not legal, tax or investment advice. Rules and rates change; check the official source linked below before you act.
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