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Home Loan FAQs

• Common Questions About Interest Rate
• Common Questions About Prepayment Fee
• Common Questions About The Type And Margin Of Properties Financed
• Common Questions About Refinancing
• Common Questions About Loan Application & Insurance

Common Questions About Interest Rate

1. What is your interest rate?
For AIA Fixed Rate Loan, the interest rate is fixed at 6.15% p.a. – all with daily interest calculation. Please refer to our Terms & Conditions section for more specific details. All packages are for a limited time period only.

2. What are the benefits of the Fixed Rate Loan?
Fixed Rate Loan offers peace of mind by locking in at a fixed rate so your monthly instalments are constant throughout the duration of the loan. Otherwise, fluctuating interest rates may exhaust your financial resources as an increase in monthly instalments can be a burden especially when other costs of living are on the rise too. Although some financial institutions do not increase your installments, when the interest rate rises, the duration of the loan is extended as your installments are insufficient to cover the increased monthly interest which will eventually increase your principal loan outstanding. In AIA HOME LOAN you are in absolute control of the interest rate and installment. So, personal financial planning can be charted for a clearer financial future for you and your family.

Common Questions About Prepayment Fee

1. Does AIA charge prepayment fee?
There will be a prepayment fee levied should the loan be refinanced within the first five years from the date of the first drawdown. The prepayment is chargeable at the rate of 0.35% times the number of remaining years of Loan (not exceeding 4% subject to a minimum rate of 2%) times the amount prepaid. However, there is no prepayment charged when the loan is repaid with own savings, EPF or sale of property which makes it more cost-effective for customers who would like to settle their loan faster if they have additional cash.

Common Questions About The Type And Margin Of Properties Financed

1. What types of properties do you finance?
Completed landed residential properties e.g. single, double-storey link, semi-detached, bungalow, etc. We also financed properties under construction. This applies only for selected developers and projects. For further information, please refer to our terms and conditions.

2. Do you finance condominiums and townhouses?
Only selected condominiums and townhouses with or without strata title issued in Penang Island and Klang Valley.

3. Do you finance shop lots or industrial lots?
Our loan is currently open for residential properties only.

4. Can you finance a property located out of Klang Valley e.g. property in Melaka?
Yes, our program is tailored for properties within the Klang Valley, Penang / Seberang Perai, Johor Bahru, Batu Pahat, Seremban, Sg. Petani, Kulim, Ipoh, Kuantan, Malacca Town, Kota Kinabalu and Kuching Town.

Common Questions About Refinancing

1. Do you refinance properties?
Yes, we refinance properties that are encumbered or currently charged to another financial institution. Our margin of finance is between 70% - 80% of OMV (Open Market Value). The purpose for refinancing is to redeem the outstanding balance of your existing financier. Additional cashout for other purposes such as renovations, education and any other commitments are considered with the exception of business investments.

2. My property is currently encumbered, can I refinance the property for personal requirements?
Yes.

3. Do you finance construction of a house if my land has already been paid off?
Not at this present moment. Currently, our program finances completed landed residential properties and selected properties under construction by selected developers only.

Common Questions About Loan Application & Insurance

1.  If I am not an AIA policy holder, can I apply the loan?
Yes, as long as you are a Malaysian Citizen. However, you will need to purchase an AIA Group Mortgage Reducing Term Assurance or AIA Life Policy to secure the loan. The insurance policy is to provide protection and peace of mind to your family when calamity befalls such as death or permanent disability. In some instances, the savings from our low interest rate compared to other financial institutions helps to subsidize this repayment.

2.  If I have existing Life policies with other insurance companies, can I assign them to AIA?
Since this is a unique HOME LOAN package from AIA, the policy must be from AIA.

3.  I am married, can I apply as a single applicant?
It is one of our terms that your spouse be a joint applicant. Both husband and wife are to be joint borrowers. Exceptions can be considered.

4. Is a valuation report required?
Yes, a valuation report is required by our panel of valuers once the loan is approved.

Valuation is only waived for properties under construction or recently completed properties purchased from selected developers.

5.  Can we have our own solicitor’s firm to prepare the loan documentation?
You are required to use the solicitors on our panel.

6. I am healthy and I do not wish to buy insurance.
Health is fragile. Our well-being cannot be guaranteed in the next five or 10 years time. Life insurance, either a Mortgage Reducing Term, Life or combination of both provides the necessary funds for your family to settle the mortgage in times of need. As such, the unique AIA HOME LOAN protects you from fluctuating interest rates, fire, life and permanent disability.

7. Can I assign my existing AIA policy instead?
Yes. However, the coverage of the policy must not be less than the mortgage loan amount.

8. You can always sell my house if anything happens to me. After all, is the house not sufficient security?
AIA would rather not recall the loan and the property. A home is needed as a means of shelter. We are in the business of helping homeowners to protect themselves and this is the reason the unique AIA HOME LOAN helps you to achieve this objective.

9. Is Life Insurance or Group Mortgage Reducing Term assurance expensive?
We have a variety of life policies to suit your needs and our agent will assist in planning according to your requirements.

You can even opt for Group Mortgage Reducing Term assurance which involves only one lump sum payment and this insurance will cover you for the entire loan period. It is the most affordable form of insurance. Depending on your age and loan amount, it can be as little as RM18 a month.

10. If this is a joint loan application, how must we insure ourselves?
Required insurance will be based on the income of both applicants. For example, if the husband is paying for the loan, then insurance on the loan amount is to be taken by the husband. However, the proportion on insurance will depend on the income earned.

Eg. Loan RM200,000 Insurance

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