If I can’t get a mortgage today, how are my chances improved in 5 years under FundMyHome?

Buying through FundMyHome rather than renting during the first five years puts you in a better financial position for a mortgage thereafter.

Continuing your journey as a homebuyer under FundMyHome, by Year 6, you would have accumulated RM60,000 or 20% equity in the home (see table below). Should you choose to apply for a 80% mortgage to buy the home, you need no further funds to meet the downpayment. This scenario assumes the home price is unchanged at RM300,000. Even if the home price rises, to say RM350,000, you would only need to top up RM10,000.

On the other hand, if you had stayed in a rented house through the first five years, you would have no equity in the home and would need to freshly raise RM60,000 towards the downpayment of 20% to purchase the same home costing RM300,000. If the home price has rises to RM350,000, you would need to raise a higher sum of RM70,000.

The reality is, you will NEVER be worse off with FundMyHome compared to renting. If the house price falls by 10%, you would still have positive equity value of 10% of the original house price. Even with a fall of 20%, you are not worse off than renting. 

The positive equity value created is what helps you to eventually own the home completely.