Cash Out Refinance Malaysia: Complete Guide 2026
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Your Property Equity
RM 300,000
Maximum Loan Amount (at 85% LTV)
RM 425,000
Maximum Cash Out
RM 225,000
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In This Guide
What is Cash Out Refinancing?
Cash out refinancing allows you to borrow more than your outstanding loan amount by tapping into your property's equity. The difference between your new loan and old loan is given to you as cash.
Example:
- • Current property value: RM500,000
- • Outstanding loan: RM200,000
- • Property equity: RM300,000
- • Cash out amount: RM100,000
- • New loan: RM300,000
You receive RM100,000 in cash while your monthly payment increases based on the larger loan.
How Does Property Cash Out Work in Malaysia?
Property Valuation
Bank assesses your property's current market value
Calculate Equity
Equity = Property Value - Outstanding Loan
Determine Cash Out Limit
Banks typically allow up to 80-90% LTV
Apply for Refinancing
Submit application with cash out request
Approval & Disbursement
Old loan settled, cash out deposited to your account
Timeline: Approximately 2-3 months from application to cash in hand.
Cash Out Refinance Limit in Malaysia
| LTV Limit | Who Qualifies | Max Cash Out |
|---|---|---|
| 90% LTV | First property, excellent credit | Higher |
| 85% LTV | Most applicants | Standard |
| 80% LTV | Second property | Lower |
| 70% LTV | Third property onwards | Lowest |
Example Calculation:
- • Property value: RM600,000
- • Maximum LTV: 85% = RM510,000
- • Outstanding loan: RM250,000
- • Maximum cash out: RM510,000 - RM250,000 = RM260,000
What Can You Use Cash Out For?
Home Renovation
Upgrade your property to increase value
Debt Consolidation
Pay off high-interest credit cards or personal loans (6-18% → 4%)
Investment
Invest in stocks, unit trusts, or another property
Children's Education
Fund local or overseas education
Emergency Fund
Build financial safety net
Business Capital
Start or expand a business
Cash Out Refinance: Pros and Cons
✅ Pros
- • Lower interest rate than personal loan (3-5% vs 6-18%)
- • Longer repayment tenure (up to 35 years)
- • Large cash amount available (RM100k-500k+)
- • Tax deductible if used for rental property improvements
- • No need to sell property to access equity
❌ Cons
- • Higher monthly payment (larger loan amount)
- • More total interest over loan tenure
- • Risk of negative equity if property value drops
- • Longer time to fully own your property
- • Refinancing costs apply (legal, valuation, stamp duty)
- • 2-3 months processing time
Cash Out Refinance vs Personal Loan vs Credit Card
| Factor | Cash Out Refinance | Personal Loan | Credit Card |
|---|---|---|---|
| Interest Rate | 3.5% - 5% p.a. | 6% - 12% p.a. | 15% - 18% p.a. |
| Loan Tenure | Up to 35 years | 1-7 years | Revolving |
| Max Amount | RM100k - RM500k+ | RM10k - RM150k | RM5k - RM50k |
| Monthly Payment | Lowest | Medium | Highest |
| Processing Time | 2-3 months | 1-2 weeks | Instant |
| Best For | Large amounts, long-term | Medium amounts | Small, short-term |
Bank Negara Cash Out Rules 2026
Important 2026 Update:
Bank Negara Malaysia introduced new policies on cash out refinancing:
- • Maximum cash out tenure: 10 years
- • While your housing loan can be 30+ years, the cash out portion must be repaid within 10 years
- • This affects your monthly payment calculation
- • Check with your bank for the latest guidelines
Banks Offering Cash Out Refinance in Malaysia
| Bank | Cash Out | Notes |
|---|---|---|
| Maybank | ✅ Yes | Up to 85% LTV |
| CIMB | ✅ Yes | Zero Moving Cost available |
| Public Bank | ✅ Yes | Competitive rates |
| RHB | ✅ Yes | My1 Home Loan |
| Hong Leong | ✅ Yes | |
| AmBank | ✅ Yes | |
| Bank Islam | ✅ Yes | Shariah-compliant |
| Standard Chartered | ✅ Yes | |
| HSBC | ✅ Yes | HomeSmart |
Documents Required for Cash Out Refinance
Personal Documents
- ✓MyKad (IC) copy
- ✓Latest 3 months salary slips
- ✓Latest 6 months bank statements
- ✓Latest EPF statement
- ✓EA Form / Form B (tax)
Property Documents
- ✓Original Sale & Purchase Agreement
- ✓Land title / Strata title
- ✓Current loan statement
- ✓Property insurance policy
- ✓Latest property assessment (cukai tanah/pintu)
Step-by-Step: How to Apply for Cash Out Refinance
Check Your Equity
Use calculator above to estimate
Compare Bank Rates
Use our Refinance Calculator
Gather Documents
Prepare all required documents
Submit Application
Apply to 2-3 banks for best offer
Property Valuation
Bank will arrange valuation
Loan Approval
Wait for approval (2-4 weeks)
Legal Documentation
Sign loan agreement
Disbursement
Receive cash out (2-4 weeks after signing)
Total timeline: 8-12 weeks
FAQ - Cash Out Refinancing
Q: What is the minimum cash out amount?
A: Most banks require minimum RM30,000 - RM50,000 for cash out refinancing.
Q: Can I cash out if my property value has dropped?
A: It will be difficult. If your property value is less than your outstanding loan (negative equity), cash out is not possible.
Q: Is cash out refinance tax deductible?
A: Only if the cash out is used for income-generating purposes like rental property improvements. Personal use is not tax deductible.
Q: How long does cash out refinance take?
A: About 2-3 months from application to disbursement.
Q: Can I do cash out on my second property?
A: Yes, but LTV limits may be lower (typically 70-80% for second property).
Q: What if I'm still in lock-in period?
A: You can still refinance but will pay early settlement penalty (2-3% of outstanding).
Q: Can foreigners apply for cash out refinance?
A: Yes, but LTV is typically capped at 60-70% for non-Malaysians.