What is LCF on a property bill? A RM13,000 "loan consultation fee" on a RM220,000 house, a RM250,000 loan, and what is wrong with both

In 2026 a woman buying her first home posted the bill she had received on Threads and asked if it was normal. The house was a RM220,000 subsale unit, the loan was RM250,000, and she had been told she would get RM30,000 in cashback; after the deductions she expected to keep less than RM10,000.

The replies were consistent: "I just bought my seventh house and have never been charged a consultation fee", "ask the agent what the RM13,000 is for", "get his name card and REN number and check it". The bill actually has three problems, taken one at a time below: the LCF is too high, the loan is bigger than the price, and the legal fees look high.

A loan consultant (or mortgage consultant) helps you apply for a home loan. Some are a bank's own sales staff; others are independent firms or individuals. A good one is genuinely useful, especially if your income is irregular, you run a business, or a bank has turned you down before. But there is no government licence or fee scale for this work, so some take shortcuts. Tell them apart by what they do:

The key fact: a bank does not charge you to apply for a home loan. A consultant's fee is something extra you choose to pay, so you are entitled to ask what it buys first, and you can skip the consultant and go to the bank directly or through your lawyer. To work out what you can borrow yourself, use our loan eligibility calculator; how DSR is counted is in DSR explained.

A bank looks at two numbers, the price on the sale agreement and its own valuation, and lends on whichever is lower, usually up to 90% for a first or second property. Applied to her case:

A loan larger than the price normally has one explanation: the price on the agreement given to the bank is higher than the real deal price, the valuation is written up to match, the bank lends on the false price, and the extra goes back to the buyer as "cashback". The trade calls it a mark-up loan. Estate agent and valuer associations quoted by StarProperty in July 2025 said it usually takes buyer, seller, agent and sometimes a valuer acting together, and may amount to cheating, fraud or abetment under the Penal Code. A Malaysian Bar circular of 27 June 2011 said a buyer who borrows on an inflated price is misrepresenting to the bank, buyer and seller may both be guilty of cheating or fraud, and a lawyer who knowingly acts on it faces the same plus Bar disciplinary action.

Even leaving the law aside, the numbers are bad for the buyer:

In other words, for less than RM10,000 in hand she takes on RM52,000 more debt and repays about RM96,700 more over 35 years. The rest of the "cashback" goes on the consultant's fee and other charges. If the real problem is a bank valuation below your price, the honest options are in bank valuation lower than the price.

Many buyers assume "the consultant did it, it's not my problem". On the bank's file, though, you are the applicant, you signed, and you are the one repaying. If the bank finds the documents were false, every consequence lands on you:

A bank may not notice straight away, but that does not mean it is over. In a Kuala Lumpur Sessions Court case, an insurance agent used forged payslips, bank statements, EPF statements, tax documents and an employer letter to borrow RM150,000 in 2018. The bank reported it in June 2020, he was arrested in November 2023, and he pleaded guilty under Penal Code section 417 (cheating, up to 5 years' jail, a fine or both) and was fined RM14,000, with 8 months' jail if unpaid. Five years passed between the loan and the arrest.

One more consequence people overlook: a mark-up loan usually means borrowing more than you can repay. A home loan is sized to your real income; fake documents inflate it, so every month you owe more than you can afford, and the chance of falling behind is much higher.

Estate agents in Malaysia are licensed and regulated by the Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVAEP, or LPPEH in Malay). The rule is simple: an agent is paid by the party they act for, and in one transaction only one side pays.

So if the agent showing you the house is already being paid by the seller and also asks you for a "consultation fee", "service fee" or "LCF", they are charging both sides. You can refuse, and you can complain to LPPEH. First enter their REN number or name at search.lppeh.gov.my to see whether they are registered and which agency they belong to; if they do not appear, they are not entitled to any fee at all. More in who pays the agent and how to check a REN.

Buying a new launch through PropertySifu, you also pay no agent fee or consultation fee; how we work is set out in the PropertySifu model.

Legal fees follow a statutory scale (Solicitors' Remuneration Order 2023): 1.25% on the first RM500,000, charged once for the sale agreement and once for the loan agreement, plus 8% service tax. Stamp duty is 1% on the first RM100,000 and 2% on the next tranche; Malaysian first-time buyers of a home up to RM500,000 pay no stamp duty on either agreement if the sale agreement is signed by 31 December 2027. On her numbers:

Even without the first-home exemption, legal fees, service tax and stamp duty on both agreements come to about RM11,000; her bill says RM20,800. The gap may be disbursements, or something else folded in. You can always ask the lawyer for an itemised bill with every line explained, and a proper firm will not refuse. The first-home exemption conditions are in stamp duty in 2026.

1. Do not sign or transfer anything yet. Ask for every charge in writing: who is charging, for what service, and how it was worked out.
2. Check the agent. Look up the REN number at search.lppeh.gov.my, confirm the agency, and pay only into the agency's account, never an individual's.
3. Call the law firm yourself. Do not rely on messages passed through the agent or consultant; ask the lawyer whether the bill came from the firm and where the itemised bill is.
4. Look at the loan amount. If the loan is bigger than the price, or someone mentions "cashback", stop and ask what price is written on the agreement. If it differs from the price you agreed, do not sign.
5. Hand over only genuine income documents. If anyone offers to "make" payslips, EPF statements or employer letters, say no.
6. If you need to complain: agents to LPPEH; lawyers to the Advocates and Solicitors Disciplinary Board; banks to Bank Negara's BNMLINK; forged documents or money taken, the police.

The full subsale process and the cash you need are in buying subsale step by step; government schemes for first-time buyers are in first-time buyer schemes. No payslip? There is a legitimate route in housing loans for the self-employed.