Every extra ringgit you put down lowers the instalment and the interest, and every extra ringgit you keep adds to the reserve that pays your expenses if something goes wrong. In the example below, each RM4,500 kept is one month of expenses.
Take a hypothetical RM500,000 home, RM100,000 of cash, household expenses of RM4,500 a month and a loan at 4.20% over 35 years. Putting 10% down (RM50,000) gives a RM450,000 loan with an instalment of RM2,046.83 and leaves RM50,000 in reserve, which covers 11.1 months of expenses. Putting 20% down (RM100,000) gives a RM400,000 loan with an instalment of RM1,819.40, which is RM227.43 less a month and RM45,518.60 less interest over 420 months, but it leaves RM0 in reserve. A RM15,000 surprise in month 6 is paid from the reserve in the first case; in the second there is no reserve to pay it from. These are hypothetical figures, not offers.
How much do you have to put down?
The down payment is the share of the price the loan does not cover. Banks publish a maximum margin of financing; the margin that applies to you is one to confirm with the bank. On the two product pages we read on 4 November 2026, CIMB's Home Loan page states a margin "of up to 95% inclusive of MRTA / MLTA / Legal fee / Valuation fee" with those items capped at 5%, and RHB's My1 Full Flexi Home Loan page states a loan margin of "Up to 90% + 10% (MRTA/CLTA + FEC with FEC not more than 5%)", where RHB's note explains FEC as legal, valuation and stamping fees. Both pages give a maximum tenure of 35 years or age 70, whichever is earlier, which is why this guide uses 35 years. Ask the bank what share of the purchase price itself it will finance for you. The 10% in our example is a planning assumption, not a bank's figure.
Legal fees, stamp duty, valuation and moving costs that are paid in cash rather than financed come out of the same RM100,000 and reduce the reserve by that amount. The examples below leave them out and this guide does not estimate them; the refinancing guide shows how a one-off cost like that is weighed against a monthly saving.
Worked example: 10%, 15% or 20% down on RM500,000
Hypothetical inputs: price RM500,000, cash available RM100,000, monthly expenses RM4,500, rate 4.20% (the same illustration our home-loan calculator opens with), 35 years (420 months), equal principal-and-interest instalments, with interest the only borrowing cost counted and no fees or insurance. The rate is an illustration, not a current bank offer, and a floating rate may change.
| Down payment | Cash put down | Loan | Monthly instalment | Change vs 20% down | Interest over 420 months | Cash left in reserve | Months of expenses covered |
|---|---|---|---|---|---|---|---|
| 10% down | RM50,000.00 | RM450,000.00 | RM2,046.83 | +RM227.43 | RM409,667.39 | RM50,000.00 | 11.1 |
| 15% down | RM75,000.00 | RM425,000.00 | RM1,933.11 | +RM113.71 | RM386,908.09 | RM25,000.00 | 5.6 |
| 20% down | RM100,000.00 | RM400,000.00 | RM1,819.40 | — | RM364,148.79 | RM0.00 | 0.0 |
How the numbers are reached:
- Instalment: P × r ÷ (1 − (1 + r)−n), with P the loan, r = 0.042 ÷ 12 = 0.0035 and n = 420. For RM450,000 that is RM2,046.83. Figures are rounded to the sen from unrounded values; compare them with the schedule your lender gives you.
- Interest over 420 months: 420 × instalment − loan, using the unrounded instalment. For RM450,000 that is RM409,667.39. (420 × RM2,046.83 − RM450,000 gives RM409,668.60 because the printed instalment is rounded.)
- Change vs 20% down: the printed instalments subtracted: RM2,046.83 − RM1,819.40 = RM227.43 and RM1,933.11 − RM1,819.40 = RM113.71. The printed interest figures give RM409,667.39 − RM364,148.79 = RM45,518.60 and RM386,908.09 − RM364,148.79 = RM22,759.30.
- Months of expenses covered: cash left ÷ RM4,500, rounded to one decimal. RM50,000 ÷ RM4,500 = 11.1 months and RM25,000 ÷ RM4,500 = 5.6 months.
Each extra RM25,000 put down lowers the instalment by about RM113.71 a month and the lifetime interest by RM22,759.30, and it removes 5.6 months of cover. Whether that trade is worth it depends on what the reserve is for, which the next section tests.
What a RM15,000 surprise does to each option
Suppose a RM15,000 cost arrives in month 6: a medical bill, a car repair or a few months without income. The instalment is due either way. Here is what is left of the reserve in each case.
| Down payment | Reserve before | Reserve after RM15,000 | Months of expenses still covered | Where the RM15,000 comes from |
|---|---|---|---|---|
| 10% down | RM50,000.00 | RM35,000.00 | 7.8 | The reserve |
| 15% down | RM25,000.00 | RM10,000.00 | 2.2 | The reserve, with little left |
| 20% down | RM0.00 | RM15,000.00 short | 0.0 | Not from the reserve, which is RM0 |
The 20% option saved RM227.43 a month, so by month 6 it has saved 6 × RM227.43 = RM1,364.58, against a RM15,000 gap. The table counts only the reserve at purchase; if that saving had been kept as cash, the gap would be RM15,000 − RM1,364.58 = RM13,635.42. The guide does not say how the gap would be met or what that would cost; it can say the gap exists. If your reserve would be below the number you need, the lower instalment does not rebuild it quickly: at RM227.43 a month it takes 66 months to reach RM15,000 (RM15,000 ÷ RM227.43 = 65.95).
Working backwards from the reserve you want
PIDM's emergency fund guide (20 July 2022) says: "You can start by saving up to 6 months of your expenses in your emergency fund." It is written as a starting point, not a rule, and the right number for you depends on how steady your income is, who depends on it and what insurance you hold. Using it as a planning line: 6 × RM4,500 = RM27,000. With RM100,000 in cash, keeping RM27,000 leaves RM100,000 − RM27,000 = RM73,000 for the down payment, which is RM73,000 ÷ RM500,000 = 14.6% of the price. At 3 months the reserve is RM13,500 and the down payment could be RM86,500, or 17.3%. The table above fixes the down payment and reads off the reserve; this paragraph fixes the reserve and reads off the down payment. Both are the same comparison from different ends.
The instalment difference also changes your debt service ratio: the RM450,000 loan adds RM227.43 a month more commitment than the RM400,000 loan. Our DSR guide explains that ratio, and if you already pay a car instalment, the car loan before a home loan guide shows how much home-loan room it uses. Treat both as planning checks and ask your lender how it assesses your commitments.
Keep the cash now, pay it in later: what waiting costs
A middle path is to put 10% down, keep the RM50,000 as a reserve while you settle in, and pay a lump sum into the loan once the reserve has been rebuilt from income. Whether you can do that, and what it does to your interest, depends on your agreement. RHB's My1 Full Flexi page says you can "prepay and redraw excess funds whenever you'd like to enjoy interest savings and shorten your loan tenure"; CIMB describes its conventional Home Loan as "a standard monthly repayment amount until the end of the tenure" without a redraw facility. Ask your bank whether a lump-sum payment reduces interest, whether it shortens the tenure or lowers the instalment, and whether notice, a minimum amount or a fee applies.
To price the wait, compare two choices that both end up with RM100,000 of your cash in the property and the same RM2,046.83 instalment. D puts 10% down, pays RM2,046.83 a month, and pays RM50,000 into the loan at month 24 while keeping the instalment. E puts 20% down and pays the same RM2,046.83 a month from the start, so it clears the smaller loan early.
| Choice | Cash down at purchase | Lump sum at month 24 | Monthly instalment | Loan ends | Interest paid |
|---|---|---|---|---|---|
| D. 10% down, RM50,000 in at month 24 | RM50,000.00 | RM50,000.00 | RM2,046.83 | Month 337 | RM287,746.86 |
| E. 20% down at purchase | RM100,000.00 | — | RM2,046.83 | Month 330 | RM274,858.26 |
- D: after 24 instalments the RM450,000 loan stands at RM438,208.45. Paying in RM50,000 leaves RM388,208.45, which RM2,046.83 a month clears with 312 more full instalments and a final part-instalment of RM12.95, so the loan ends at month 337. Interest paid, using the unrounded instalment, is RM287,746.86. (336 × RM2,046.83 + RM12.95 + RM50,000 − RM450,000 gives RM287,747.83 because the printed instalment is rounded.)
- E: RM2,046.83 a month clears RM400,000 with 329 full instalments and a final part-instalment of RM1,452.14, so the loan ends at month 330. Interest paid is RM274,858.26. (329 × RM2,046.83 + RM1,452.14 − RM400,000 gives RM274,859.21 for the same reason.)
- The price of waiting two years: RM287,746.86 − RM274,858.26 = RM12,888.60 of extra interest, before any interest the RM50,000 earns while it sits in a savings account, which this guide does not estimate. That is what 24 months of keeping RM50,000 liquid costs in this example, and it is the number to set against the RM15,000 gap in the table above.
Before you choose the down payment: a short check
- Write down your monthly expenses and how many months of them you want in reserve after the purchase; the section above shows what down payment that leaves.
- Cash costs the loan does not cover (legal, stamp duty, valuation, moving) come out of the reserve; the tables above count none of them.
- Ask the bank what share of the price it will finance for you, and whether its margin includes insurance and entry costs.
- Ask what a lump-sum payment does under the product you are offered, and whether a redraw facility exists.
- Run the instalment at a higher rate as well. The 1% rate change guide shows what one point does to a long loan, and the bank reference rates table shows where each bank's rate stands.
- Compare published rates and spreads in the home-loan comparison, and test your own price, rate and tenure in the home-loan calculator. If you are weighing a lump-sum payment later, the mortgage early-settlement calculator shows the interest it saves.
The same trade-off applies to a car: our car loan down payment guide compares 10%, 20% and 30% down on a RM100,000 car.
Is a bigger down payment on a house always better?
Not always. On a hypothetical RM500,000 home at 4.20% over 35 years, 20% down instead of 10% cuts the instalment by RM227.43 a month and the interest by RM45,518.60 over 420 months, but it uses RM50,000 of cash that would otherwise cover 11.1 months of RM4,500 expenses. The better choice depends on how much reserve you have left after the purchase.
How much emergency fund should I keep when buying a house?
PIDM's emergency fund guide says you can start by saving up to 6 months of your expenses. At RM4,500 a month that is RM27,000. With RM100,000 in cash, keeping RM27,000 leaves RM73,000 for the down payment, which is 14.6% of a RM500,000 home. Your own expenses, income stability and dependants set your number.
Can I pay a lump sum into the home loan later instead of a bigger down payment?
It depends on your loan agreement. In our example both choices pay RM2,046.83 a month: putting 10% down and paying RM50,000 into the loan at month 24 costs RM12,888.60 more interest than putting 20% down at purchase and paying that same instalment from the start. Ask the bank whether a lump-sum payment reduces interest, and whether notice, a minimum amount or a fee applies.
Calculate with your own numbers
Indicative planning only; not an offer, a quotation, financial advice or a forecast of rates. Ask your lender for a written offer with itemised costs and query any unexplained amount before you sign.
Sources
- PIDM (Perbadanan Insurans Deposit Malaysia), How To Start An Emergency Fund ("You can start by saving up to 6 months of your expenses in your emergency fund") — dated 20 July 2022; reviewed 4 November 2026.
- CIMB, Home Loan product page (margin of financing up to 95% inclusive of MRTA / MLTA / legal fee / valuation fee, capped at 5%; tenure up to 35 years or age 70, whichever is earlier; standard monthly repayment without redraw facility) — reviewed 4 November 2026.
- RHB, My1 Full Flexi Home Loan product page (loan margin up to 90% + 10% for MRTA/CLTA and finance entry cost, FEC not more than 5%; tenure maximum 35 years or age 70, whichever is earlier; prepay and redraw excess funds) — reviewed 4 November 2026.
Instalment, interest, reserve and cost-of-waiting figures are Kira Dulu's own calculations from the stated hypothetical inputs; the RM4,500 expenses and RM15,000 surprise are assumptions, not statistics.