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Cost guide · 8 min read

How do renovation loans work in Malaysia?

Renovation loans in Malaysia: personal loans from RM5,000, home loan add-ons up to RM500,000, rates checked November 2026, and the 2027 flat rate ban.

Published
2 Nov 2026
Updated
2 Nov 2026
Trade
renovation-contractor

Estimate your cost

RM 4,400 to RM 12,900 total

Assumes 100 sq ft, mid-tier finish, George Town pricing.

This is an indicative estimate, not a quote. Your actual price depends on scope, materials, and site conditions.

Rates reviewed 2026-11-02. Source: cost guide.

Get exact quotes from a local contractor

Malaysian banks lend for renovation from RM5,000 on an unsecured personal loan up to RM500,000 as a renovation add-on to a home loan. Which one you can get depends on whether you are buying, already own the home with a mortgage, or own it outright. The cheapest money is usually the loan tied to your house. The fastest is a personal loan.

This is not financial advice. Rates and product terms below were checked on bank and comparison pages on 2 November 2026. They change often, so confirm with the bank before you sign anything.

The three ways to borrow for a renovation

Personal loan, RM5,000 to RM100,000

A personal loan is unsecured: no property is pledged, approval is fast, and the money goes to your account to spend as you like. The trade-off is a higher rate and a short tenure.

Examples from bank pages checked on 2 November 2026:

  • Maybank Personal Loan: RM5,000 to RM100,000, over 2 to 6 years. Fixed rates of 8% a year for RM5,000 to RM20,000, 7% for RM20,001 to RM50,000, and 6.5% for RM50,001 to RM100,000. Open to Malaysians aged 21 to 60 with a gross monthly income of RM3,500 or more.
  • CIMB Cash Plus Personal Loan: up to RM100,000, over 2 to 7 years. Fixed rates from 4.38% to 19.88% a year, which CIMB states as effective interest rates of 8.08% to 31.42% a year. The lowest rate is for CIMB Preferred customers only. Stamp duty is 0.5% of the approved amount.

Note the gap between the advertised rate and the effective rate. Most personal loans today use a flat rate, where interest is charged on the full original amount for the whole tenure. The effective rate, which reflects the balance you actually owe, is close to double.

Renovation add-on when you buy a home, up to RM500,000

Some banks let you borrow for the renovation in the same application as the home loan, as a separate account on top of the usual 90% housing loan.

  • Maybank Home+Reno Financing: up to an extra 30% of the property price or market value, whichever is lower, to a combined 120%, with a maximum of RM500,000 for renovation. It is for landed sub-sale homes (not bought from a developer), for a first or second home. On Penang Island, the minimum property value is RM300,000.
  • RHB My1 Home and Renovation Loan: renovation loan of up to 30% of the property price or market value, whichever is lower, on top of a 90% housing loan. The minimum renovation loan is RM50,000, with a tenure of 5 to 35 years or until age 70.

Because these are tied to the home loan, the rate is close to housing loan rates, not personal loan rates.

Top-up on your existing home loan, up to RM250,000

If you already have a mortgage, some banks offer a separate renovation account against the same property.

  • Maybank MyDeco: for existing Maybank home financing customers. Up to an extra 30% of the property value, to a combined 120%, with a maximum of RM250,000, over up to 10 years or age 70.
  • Alliance Home Complete: RM10,000 to RM150,000 on top of an Alliance home loan, offered as a bundle with the mortgage, over up to 10 years.
  • AFFIN Home Reno-i: an Islamic renovation financing product for Malaysians aged 18 and above, with a minimum gross monthly income of RM5,000.

Expect a property valuation, legal fees and stamp duty on a secured top-up. Those costs make it poor value for a small job.

Rate table

Headline rates checked on 2 November 2026. Your approved rate depends on your credit profile.

Product type Amount Tenure Headline rate
Personal loan (Maybank) RM5,000 to RM100,000 2 to 6 years 6.5% to 8% a year, fixed
Personal loan (CIMB Cash Plus) up to RM100,000 2 to 7 years 4.38% to 19.88% a year, fixed
Home loan, for comparison varies up to 35 years about 3.9% to 5.5% a year
Renovation add-on or top-up up to RM500,000 up to 35 years close to the home loan rate

The Overnight Policy Rate (OPR) set by Bank Negara Malaysia was 2.75% when we checked. Bank Negara's next decision is on 5 November 2026. Most home loans float with the OPR, so a change moves your instalment.

A worked example: borrowing RM30,000

Option Rate and method Tenure Monthly Total interest
Personal loan 7% flat 5 years about RM675 about RM10,500
Personal loan 7% reducing balance 5 years about RM594 about RM5,640
Home loan top-up 4.5% reducing balance 10 years about RM311 about RM7,310

The flat-rate loan costs almost twice as much interest as the same rate on a reducing balance. The home loan top-up has the lowest instalment but runs twice as long, and you also pay valuation and legal fees to set it up. These figures are our own arithmetic for illustration, not bank quotes.

The 2027 change: no more flat-rate personal loans

Bank Negara Malaysia's Policy Document on Personal Financing, issued on 30 September 2025, bans flat-rate and Rule of 78 interest for personal financing from 1 January 2027. From that date, new personal loans must charge interest on the reducing balance, which lowers the total interest for the same headline rate and does not penalise early settlement.

Two other rules start on the same date:

  • Banks must disclose the effective interest or profit rate before you sign.
  • Anyone who applies for personal financing of more than RM100,000 must first complete a short financial education module.

Loans signed before 2027 keep their original terms. If you can wait until January 2027 for a personal loan, compare the new reducing-balance offers before you commit.

What changes your rate

The loan type

Secured loans tied to your home carry lower rates than unsecured personal loans. This is the single biggest factor.

The amount

Some banks price by band. At Maybank, a loan above RM50,000 gets a lower rate than one under RM20,000.

Your profile

Income, existing debts and your relationship with the bank all matter. CIMB's lowest rate is only for its Preferred customers, and the top of its range is more than four times the bottom.

The tenure

A longer tenure lowers the monthly instalment but raises the total interest.

How to compare loan offers

  1. Get the renovation quote first. Price the job with two or three contractors, then borrow for that number plus a buffer, not a round figure.
  2. Compare effective rates, not headline rates. Ask each bank for the effective interest rate and the total amount payable over the full tenure.
  3. List every fee. Stamp duty, processing fees, valuation, legal fees and early settlement charges change the real cost.
  4. Check the use of funds. Add-on and top-up products are paid for renovation work. Ask how and when the bank releases money, and what documents it needs from your contractor.
  5. Match the tenure to the asset. A kitchen that lasts 15 years can sit on a longer loan. Paint and soft furnishings should not.
  6. Test your budget at a higher rate. If the OPR rises, home-linked loans cost more each month.

Related guides

Browse renovation contractors in George Town →

Sources

Rates checked against the public sources above on 2 November 2026. Compiled by Wei Han, founder of Penang Renovations.

This guide was drafted with AI assistance from the public sources listed above. Prices are planning ranges, not quotes. If you spot an inaccuracy or have a recent quote to share, contact us at penangrenovations.com@gmail.com.

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Common questions

How much can I borrow for a renovation in Malaysia?
Malaysian banks lend for renovation from RM5,000 on an unsecured personal loan up to RM500,000 as a renovation add-on to a home loan. Maybank Personal Loan covers RM5,000 to RM100,000, Maybank Home+Reno Financing allows up to RM500,000 for renovation, and Maybank MyDeco allows up to RM250,000 as a top-up for existing Maybank home financing customers. This is not financial advice.
What are personal loan rates for renovation in Malaysia?
Checked on 2 November 2026, Maybank Personal Loan charged fixed rates of 6.5% to 8% a year and CIMB Cash Plus 4.38% to 19.88% a year, which CIMB states as effective interest rates of 8.08% to 31.42%. Loans tied to your home carry rates close to home loan rates, about 3.9% to 5.5% a year. Rates change often, so confirm with the bank. This is not financial advice.
What changes for personal loans in Malaysia from 2027?
Bank Negara Malaysia's Policy Document on Personal Financing bans flat-rate and Rule of 78 interest for personal financing from 1 January 2027, so new personal loans must charge interest on the reducing balance. Banks must also disclose the effective interest rate before you sign, and applicants for more than RM100,000 must first complete a short financial education module.