How to Calculate Your LPPSA Eligibility and Financing Amount (2026)

LPPSA works out your financing in two stages. First it sets the largest monthly instalment you can afford: for a first financing, the instalment must not exceed 60% of your net income, and your total debt must not exceed 80% of net income. Net income is your basic salary plus the fixed allowances LPPSA counts, minus the compulsory deductions it takes into account. That instalment, at LPPSA's 4% rate over the allowed period, gives your maximum eligibility. The approved amount is then the lowest of the property price, the JPPH valuation, the amount you applied for, and your maximum eligibility.

This guide walks through each step with a worked example, explains what the calculation leaves out, and shows how to use your estimate before you commit to a property. It follows LPPSA's current rules in the Pekeliling Pembiayaan Perumahan LPPSA Bil. 1/2026 (LPPSA Housing Financing Circular No. 1/2026) and the accompanying Garis Panduan (guidelines), in force from 1 January 2026. Your own figure should always be confirmed with the official LPPSA eligibility calculator.

Quick summary

• Instalment limit: up to 60% of net income for a first financing, or 50% for a second financing.

• Total debt limit: total debt must not exceed 80% of net income.

• Net income: basic salary plus counted fixed allowances, minus compulsory deductions.

• Rate: 4% a year on a reducing balance for the conventional scheme (SPPSA). The Islamic scheme (SPPSAi) has a 7% profit rate, but customers enjoy an effective 4% through rebate (ibra').

• Maximum period: a first financing runs for up to 420 months (35 years) or until you reach age 90, whichever comes first. A second financing runs for up to 360 months or until age 90.

• Approved amount: the lowest of the price, the JPPH valuation, the amount applied for, and your maximum eligibility.

Step 1: Work out your net income the way LPPSA does

Your eligibility is not based on your gross pay. The guidelines define net income as basic salary plus the fixed allowances LPPSA counts, minus the compulsory deductions it counts.

According to LPPSA's FAQ on eligibility calculation:

• Fixed allowances counted include ITP, ITKA, ITK, ITKT, ITJU, EPW, acting allowance, COLA, BIW, BISM and BISS.

• Compulsory deductions counted include EPF (KWSP), SOCSO (PERKESO), income tax, civil or Syariah court orders, salary overpayment recovery, and housing loan repayments.

• Deductions not counted include zakat, special armed forces (ATM) deductions and savings deductions.

• Deductions outside your payslip are not taken into account.

LPPSA's FAQ treats payments received from time to time, such as salary arrears, overtime and similar payments, separately from fixed allowances, so leave them out of your own estimate.

Step 2: Apply the instalment limit

Multiply your net income by 60% for a first financing, or by 50% for a second financing. The result is the highest monthly instalment LPPSA will allow under this test.

Step 3: Check the total debt limit

Your total debt must also stay within 80% of net income. If you already have debts deducted through your payslip (for example, a personal financing repaid by salary deduction), this second test can be the tighter one. The LPPSA calculator applies both tests using your payslip data, so treat your own figure for this step as a rough check only.

Step 4: Turn the instalment into a financing amount

With the maximum instalment known, the financing amount depends on the rate (4%) and the number of months. The period is limited to 420 months for a first financing, and it cannot run past age 90. For example, an applicant aged 60 can have a period of no more than 30 years, because 60 plus 30 reaches age 90.

The table below shows roughly how much a monthly instalment supports at 4% over different periods. These figures use a standard reducing-balance formula and are for illustration only. LPPSA's own figure may differ.

Your maximum eligibility is also capped by LPPSA's maximum eligibility table in the guidelines. Budget 2026 announced that the maximum LPPSA financing eligibility would be raised to up to RM1 million. LPPSA's July 2026 notice on its Budget 2026 initiatives linked the increase to civil servants' salary adjustments, and on 4 September 2026 LPPSA published a notice on improving eligibility limits, based on repayment ability, up to RM1 million. The cap that applies to you still depends on your own repayment ability and LPPSA's current rules. Check the calculator rather than assuming the highest figure.

Step 5: Compare with the price and the JPPH valuation

Under paragraph 5.4.1 of the circular, the approved amount is the lowest of:

1. the property price;

2. the valuation by JPPH (Jabatan Penilaian dan Perkhidmatan Harta, the government valuation department);

3. the amount you applied for; or

4. your maximum eligibility.

So even if your salary supports RM550,000, a property priced at RM480,000 and valued by JPPH at RM460,000 would be financed on the basis of RM460,000. The RM20,000 difference would be yours to pay.

Worked example

Assume a first financing, an applicant aged 40, and these payslip figures:

If the same applicant also had RM1,000 a month of other debt deducted through their payslip, and LPPSA counted it towards total debt, the 80% test would leave roughly RM2,280 a month for the new instalment (RM3,280 minus RM1,000). That would bring the supported amount down to about RM515,000 over 35 years.

Notice how much the net income step matters. If you worked out 60% of the gross RM4,500 instead of the net RM4,100, you would get RM2,700 a month and a noticeably higher figure. Some guides apply the 60% to gross pay in this way, which overstates what you are likely to qualify for.

What the calculation does not include

Under the guidelines, your eligibility amount does not include the MRTA or MRTT (mortgage reducing term insurance or takaful) premium, the LTHO (long-term homeowner) insurance or takaful, or the legal fees for preparing the financing documents. However, the approved financing amount can include the property price, the MRTA/MRTT and LTHO costs, and the legal fees for preparing the financing agreement, together with taxes or other costs LPPSA allows.

Legal fees for the SPA (sale and purchase agreement) and the transfer are not financed. LPPSA's FAQ on legal fees also lists caveat fees, stamp duty and statutory declarations among the costs that are not covered. Plan for those in cash. For how loan documentation fees work generally, see Housing Loan & Loan Agreement Legal Fees in Malaysia.

Special cases that change the calculation

• Second financing. The instalment limit falls to 50% of net income, and the maximum period is 360 months or until age 90. The current circular allows a second financing only after the first has been settled. However, LPPSA has announced, as a Budget 2026 initiative, that a second financing will be possible without first settling the first, and published a notice on improvements to second financing on 24 August 2026. Check the current conditions with LPPSA.

• Renovation (Type 7). The instalment must not exceed 50% of net income, including repayment of your first financing.

• Building on land financed by LPPSA (Type 6). Eligibility is based on your remaining eligibility, and the instalment for the land financing (Type 4, or Type 5 for land) counts as a compulsory deduction.

• Applicants aged 55 and above. You must submit a pension estimate certified by your Head of Department.

• Younger applicants. LPPSA's Young Housing Financing Scheme (SPPM), for applicants aged 30 and below when they apply, allows a longer period of up to 40 years (or until age 90 for pension-scheme members, or retirement age for EPF-scheme members, whichever is earlier). A longer period means a lower instalment for the same amount. LPPSA's July 2026 notice said SPPM applications were extended until 31 December 2026. Check the current SPPM terms before relying on them.

Why your estimate may differ from LPPSA's figure

• LPPSA uses the allowances and deductions on your actual payslip, not the ones you think apply.

• The JPPH valuation may be lower than the price.

• Your age may shorten the period.

• Your other debts may make the 80% total debt test the limiting factor.

• LPPSA's maximum eligibility table may cap the amount.

How to use your estimate before committing to a property

1. Run the official calculator with your latest payslip and note the figure.

2. Work out the cash you will need if the approved amount is lower than the price, including SPA legal fees and stamp duty.

3. Set your property budget below your maximum eligibility, not at it, in case the valuation comes in lower.

4. Make sure the booking form or SPA does not commit you to paying before LPPSA can realistically approve and release funds.

5. Keep your payslip "clean" in the months before applying, where you can. New salary-deducted debts can reduce your eligibility.

For the general principle of checking finance before choosing a property, see When Should You Check Home Loan Eligibility: Before or After Finding a Property?

How ASCOLAW can help

ASCOLAW (Messrs Akmal Saufi & Co) acts in property purchases and LPPSA financing documentation. LPPSA decides your eligibility and the approved amount. Once you are ready to proceed, we can review the booking form or SPA, check the title, prepare the SPA for the purchaser and the LPPSA financing documents, and explain the costs and cash you will need based on your actual transaction.

If you have an estimate from the LPPSA calculator and a property in mind, fill in the ASCOLAW enquiry form below with the price, the property type and your expected timeline.

Frequently asked questions

How do I calculate my LPPSA eligibility?

Take your net income (basic salary plus counted fixed allowances, minus compulsory deductions) and multiply it by 60% for a first financing. That is your maximum monthly instalment, as long as your total debt stays within 80% of net income. Convert that instalment into a financing amount at 4% over the allowed period, then compare it with the price and JPPH valuation. The lowest figure applies.

Is the 60% based on my gross salary?

No. Under the current guidelines, the 60% (or 50% for a second financing) is applied to net income, meaning basic salary plus counted fixed allowances minus the compulsory deductions LPPSA counts.

What is the maximum amount LPPSA will finance in 2026?

Budget 2026 announced that the maximum LPPSA financing eligibility would be raised to up to RM1 million, and LPPSA published a notice on 4 September 2026 on improving eligibility limits, based on repayment ability, up to that level. The figure that applies to you depends on your own repayment ability and LPPSA's current rules, so use the official LPPSA calculator.

Are legal fees included in LPPSA financing?

The legal fees for preparing the LPPSA financing documents can be included in the approved financing amount, but they are not counted in your eligibility calculation. Legal fees for the SPA and the transfer are not financed.

How long can LPPSA financing run?

For a first financing, up to 420 months or until you reach age 90, whichever comes first. For a second financing, up to 360 months or until age 90. The SPPM scheme for applicants aged 30 and below allows up to 40 years.

This article is general information only and is not legal or financial advice. The figures are illustrations, not LPPSA decisions. LPPSA's rules, maximum eligibility table and calculator may change; confirm your position with LPPSA's current circular, guidelines and calculator before committing to a purchase.

Related guides

• Home Loan Eligibility: Understand DSR, Income and Commitments Before Applying

• Buying a Home? Don't Set Your Budget Based on the Monthly Instalment Alone

• Home Loan Approved Below the Purchase Price: How Much Extra Cash Do You Need?

• Legal Fees for Buying and Selling a House in Malaysia (2026 Guide)

• Property lawyer services