Every employee in Malaysia contributes for provident fund for a carefree retirement and for property purchase. Malaysian are allowed to withdraw money from their provident fund to pay for their first house, and the second if the first house is sold off or the ownership is given to another. If one is under the age of 55, and the second account has more than RM 500, then one is qualified to withdraw the money to pay off the housing loan. That said, there are rules and regulations one needs to obey.

Case 1:
If you owe the bank RM 25K, but in your provident funds you have RM 60 K, you will only be allowed take RM 60K out of your savings.

Case 2:
If you owe the bank RM 70K, but you only have RM 60K in your provident fund, you are allowed to withdraw all RM 60K.

Conditions for initial payment:
1. Purchase / construction for residential purposes.
2. Location must be within Malaysia.
3. Paid by bank loan or cash.
4. sale agreement is within 3 years from the date EPF accepted the application.
5. Withdrawal is permitted for first house and second house, if there is proof of sale of first house or proof of transfer of ownership of the first house.
6. Approved by EPF.
7. Purchase of land to build a house (Not more than 6 months between the contract for land purchase and building of the house).

Withdrawals are not allowed for the following purposes:
1. Purchase of land only.
2. Purchase of 2 houses and above simultaneously.
3. Renovation cost for existing house.
4. Purchase of third house.
5. Purchase through bank drafts.

Conditions for repayment of mortgage:
1. Purchase or construction of a house.
2. Located within Malaysia.
3. Purchased with a bank loan.
4. Mortgaged to the bank.
5. Property purchased under the owner’s name.
6. 1 withdrawal per year.
7. Withdrawal for repayment of mortgage of the same house.

Conditions for withdraw to help with spouse’s mortgage:
1. House built or purchased by the spouse.
2. Bank’s approval on mortgage.
3. House owned by the spouse or joint.
4. Marriage certificate or child birth certificate as evidence.

Tips:
If after the purchase of the first house, and one is interested to purchase a second property, it is advisable to transfer the ownership of the first house to one’s spouse. Then, apply for a withdrawal from the second account. This method helps you to fund the house with your EPF savings while saving on stamp duty.


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