Rent vs Buy Calculator Malaysia
A RM500,000 home (10% down, 4.2%, RM 2,046.83 instalment) against renting at RM1,800 a month: with prices up 3% and a 5% investment return a year, after 10 years the buyer has RM 272,014 and the renter RM 193,066; buying pulls ahead in year 5. Enter your own figures below.
Result
Buying comes out ahead
After 10 years: buy RM 272,014, rent RM 193,066
| Buyer's wealth | RM 272,014 |
|---|---|
| Renter's wealth | RM 193,066 |
| Up-front cost of buying | RM 74,075 |
| Monthly instalment | RM 2,046.83 |
| First-month cost of owning | RM 2,463.50 |
| Buying pulls ahead | Year 5 |
| Year | Buy | Rent |
|---|---|---|
| 1 | RM 55,322 | RM 85,741 |
| 2 | RM 76,328 | RM 97,492 |
| 3 | RM 98,041 | RM 109,317 |
| 4 | RM 120,486 | RM 121,206 |
| 5 | RM 143,689 | RM 133,145 |
| 6 | RM 167,675 | RM 145,120 |
| 7 | RM 192,471 | RM 157,117 |
| 8 | RM 218,107 | RM 169,118 |
| 9 | RM 244,611 | RM 181,108 |
| 10 | RM 272,014 | RM 193,066 |
A simple pre-tax estimate; RPGT and interest rate changes are not included.
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Who comes out ahead: price growth against years
A RM500,000 home, RM1,800 rent rising 3% a year, 5% investment return.
| Price growth a year | 5 years | 10 years | 20 years |
|---|---|---|---|
| 0% | Rent RM 65,080 | Rent RM 79,497 | Rent RM 47,076 |
| 2% | Rent RM 15,673 | Buy RM 21,288 | Buy RM 159,380 |
| 3% | Buy RM 10,544 | Buy RM 78,948 | Buy RM 297,421 |
| 5% | Buy RM 66,157 | Buy RM 210,840 | Buy RM 667,408 |
How the comparison is worked out
- Up-front cost of buying = down payment + transfer and loan stamp duty + SRO 2023 legal fees + SST.
- Each year: the buyer pays the instalment and ownership costs; the renter pays rent. Whoever spends less invests the difference.
- The renter invests the buyer's up-front cost in year one.
- At the end: buyer = home value × (1 − selling costs) − loan balance + investments; renter = investment pot.
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When renting makes more sense
- You may change job or city within 3 to 5 years.
- Prices in the area are flat or oversupplied.
- You reliably invest the difference (for example ASB, voluntary EPF or an index fund).
When buying makes more sense
- You will stay a long time and rents in the area are high relative to prices.
- You qualify for the first-home stamp duty exemption or schemes such as the Housing Credit Guarantee Scheme.
- A fixed instalment gives certainty against rent that rises every year.
Sources
- FMT: first-home stamp duty exemption to 2027
- Bank Negara Malaysia: monetary policy statement
- Home Loan Calculator: stamp duty and SRO 2023 legal fees
Disclaimer: An estimate for comparison, not financial advice. Home price growth and investment returns are not guaranteed.
Frequently asked questions
Is it better to rent or buy a home in Malaysia?
It depends on how long you stay and how fast prices rise. For a RM500,000 home against RM1,800 rent, with prices up 3% and a 5% investment return a year, the buyer is worth RM 272,014 against the renter's RM 193,066 after 10 years, and buying pulls ahead in year 5. If prices do not rise, renting often wins.
What is the up-front cost of buying a RM500,000 home?
With 10% down: a RM50,000 down payment, RM 11,250 in stamp duty (transfer and loan agreement) and RM 12,825 in legal fees and SST, about RM 74,075 in total. First-home buyers under RM500,000 are exempt from stamp duty until 31 December 2027.
How does this calculator compare renting and buying?
The renter invests the money the buyer spends up front, and each year whoever spends less invests the difference. After the chosen period, the buyer's wealth is the home's value less selling costs and the loan balance, and the renter's is the investment pot.
How long do I need to stay for buying to pay off?
Usually at least 5 to 7 years, because the up-front costs (stamp duty, legal fees) and selling costs must be recovered through the home's growth and principal repaid. Our example breaks even in year 5.
What does owning a home cost besides the instalment?
Assessment and quit rent, maintenance fees and sinking fund for strata homes, fire insurance or MRTA, and repairs. The calculator uses a yearly percentage of the price; 1% is a common estimate.
Is renting throwing money away?
Not necessarily. Renters avoid the up-front costs and loan interest, and can invest the difference. Renting wins when home prices grow slowly, you move within a few years, or your investment return is high.
What is the instalment on a RM500,000 home?
For a RM450,000 loan (10% down) at 4.2% over 35 years, the instalment is RM 2,046.83 a month.
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