LPPSA (Lembaga Pembiayaan Perumahan Sektor Awam) is the government home loan for Malaysian civil servants. From 4 October 2026 the maximum rises to RM1 million, and you can apply for a second loan without settling the first. But each person gets only two LPPSA loans in a lifetime, and both share the same limit.
Not everyone gets RM1 million. The limit follows your net income (basic pay plus fixed allowances, minus the compulsory deductions LPPSA recognises) step by step: RM6,000 net income caps at RM730,000, and you need more than RM10,000 to reach RM1 million.
The second loan is what is left, not a fresh limit. On RM6,000 net income with RM400,000 used on the first loan, the second can be at most RM330,000, and only 90% of the price while the first is unpaid.
A third home means a bank loan. LPPSA is not on Bank Negara's list of institutions that report into CCRIS, the national loan record. Whether a bank counts it when deciding which home loan you are on varies by bank, so ask before you apply.
She thought she had RM600,000 left. She has RM330,000
Fen is a teacher with RM6,000 net income. Five years ago she bought a terrace house with LPPSA and borrowed RM400,000.
This year she heard "LPPSA now lends up to RM1 million and you don't need to settle the first loan", and assumed she had RM600,000 left.
She has RM330,000. And because the first loan is still running, the second can cover at most 90% of the price.
What changed on 4 October 2026?
LPPSA's notice of 25 September 2026 lists the changes, effective 4 October 2026:
| Item | Before | From 4 October |
|---|---|---|
| Maximum limit | RM750,000 | Up to RM1 million, tiered by net income |
| Second loan | First loan had to be settled | No need to settle; apply with the remaining limit |
| Rate | 4% | 4% on the combined amount up to RM750,000; 4.5% on the part from RM750,000 to RM1 million |
Applications submitted before 4 October are processed on the limits in force on the day they were received, and cannot be switched to the new limits.
How much can I borrow? Start with net income
LPPSA's "net income" is basic pay plus fixed allowances, minus the compulsory deductions LPPSA recognises. The limits:
| Net income (RM) | Maximum eligibility (RM) |
|---|---|
| 2,500 or less | 280,000 |
| 3,000 | 350,000 |
| 4,000 | 480,000 |
| 5,000 | 610,000 |
| 6,000 | 730,000 |
| 7,000 | 800,000 |
| 8,000 | 850,000 |
| 9,000 | 900,000 |
| 10,000 | 950,000 |
| Above 10,000 | 1,000,000 |
The limit is only a ceiling. The amount approved is the lowest of four numbers: the price, the JPPH (government valuation department) valuation, the amount you apply for, and your limit.
Two repayment rules also apply:
- First loan: the instalment cannot exceed 60% of net income, and total debt cannot exceed 80%.
- Second loan: the instalment cannot exceed 50% of net income, and total debt still cannot exceed 80%.
How the second loan works: only what is left is yours
This is where most people get it wrong. LPPSA's rule: the second loan limit equals your current limit minus the amount approved for the first. Fen's numbers:
| Amount | |
|---|---|
| Limit on RM6,000 net income | RM730,000 |
| Already used on the first loan | RM400,000 |
| Second loan at most | RM330,000 |
| Margin while the first is unpaid | Up to 90% |
| So the second home price is about | Up to RM366,700, with about RM36,700 of her own |
If the first loan is fully settled, the second can go up to 100%. Three more rules:
- One property at a time.
- Salary deduction for the first loan must have started, with no arrears, before you can apply for the second.
- The second loan runs shorter: at most 360 months (30 years), against 420 months (35 years) for the first, and no later than age 90 for pension-scheme staff or the end of service for EPF-scheme staff, whichever comes first.
4% or 4.5%? It depends on both loans together
The rate is set on the combined amount of both loans, not each loan separately.
LPPSA's own example: RM250,000 used on the first loan, RM750,000 applied for on the second. Together that is RM1 million; the RM250,000 above RM750,000 is charged 4.5%, so the second loan's rate is 4.17%. Someone who used RM750,000 on the first loan pays 4.5% on the whole second loan.
Who can borrow, and for what?
- Malaysian citizens.
- Civil servants, police, armed forces, and staff of statutory bodies and local authorities: permanent post, at least one year of service, and confirmed in the post.
- Not bankrupt, and not facing disciplinary action for dismissal.
It finances homes: a completed house, one under construction, building on your own land, buying land to build, taking over a bank home loan, and renovating a home LPPSA financed. For leasehold, at least 10 years must remain on the lease after the loan is paid off.
Civil servants aged 30 and below can also use the Skim Pembiayaan Perumahan Muda (SPPM) for a tenure of up to 40 years, with applications open until 31 December 2026. A longer tenure lowers the instalment but raises total interest.
A third home: you need a bank, and banks count differently
LPPSA gives you two loans. For a third home you go to a bank, and Bank Negara's rule applies: at most 70% on a third home loan. The question is whether your LPPSA loan counts as "one".
- LPPSA is not on Bank Negara's list of CCRIS reporting institutions. A bank that only checks CCRIS may not see it.
- But your payslip shows the LPPSA deduction every month, and the application form asks about existing loans. A bank that sees it will count it.
So the same civil servant can get 90% from one bank and 70% from another. Nobody miscounted; they saw different records. Details in one bank 70%, another 90%: why.
Our advice: declare your LPPSA loan on the form. Getting 90% because it was missed, then dropping to 70% when the bank re-checks, hurts more than knowing it is 70% from the start.
LPPSA or a bank? One table
| LPPSA | Bank | |
|---|---|---|
| Rate | 4% on the combined amount up to RM750,000, 4.5% above; up to 7% on default and similar cases | Usually floats with the bank's reference rate |
| Maximum margin | Up to 100% on the first loan | Usually 90% on the first and second; 70% at most from the third |
| How many loans | Two in a lifetime, sharing one limit | No fixed number; depends on what your income can carry |
| Repayment | Deducted from salary every month | Transfer or bank auto-debit |
| Reported into CCRIS? | Not on Bank Negara's list of reporting institutions | Yes |
| Valuation | JPPH, the government valuation department | The bank's panel valuer |
What buyers ask
What is the maximum LPPSA loan in 2026?
From 4 October 2026, up to RM1 million, but only net income above RM10,000 reaches the top. RM5,000 net income caps at RM610,000; RM3,000 at RM350,000.
Must I settle my first LPPSA loan before buying a second home?
Not from 4 October 2026. Salary deduction for the first loan must have started with no arrears; the second loan uses only the remaining limit, and is capped at 90% while the first is unpaid.
What is the LPPSA interest rate?
4% on the combined amount of both loans up to RM750,000, and 4.5% on the part from RM750,000 to RM1 million, so the effective rate sits between 4% and 4.5%.
Will my LPPSA loan affect a bank loan for a third home?
LPPSA is not on Bank Negara's list of CCRIS reporting institutions, but banks can see it from your payslip deduction and your application form. Whether it counts as a home loan varies by bank, so ask before applying.
Can contract staff or civil servants on probation apply for LPPSA?
LPPSA's current rules require a permanent post, at least one year of service, and confirmation in the post.
Effective 4 October, RM1 million limit, income table, second loan without settling the first, older applications on old limits, 4%/4.5% rate and the 4.17% example, second-loan margin of 90%/100% and conditions: LPPSA notice of 25 September 2026 and its FAQ (LPPSA announcements). Two loans, second-loan limit, eligibility and the lowest-of-four rule: LPPSA Pekeliling Pembiayaan Perumahan Bil. 2/2026, paragraphs 5.1 and 5.4; 60%/50%/80% caps, 100% first loan, one property at a time, leasehold rule and 420/360-month tenures: Garis Panduan Pembiayaan Perumahan LPPSA Bil. 2/2026, paragraphs 5, 6 and 12 (LPPSA new customers page). SPPM: LPPSA "Inisiatif Baharu LPPSA 2026" (22 July 2026). Fen's example is our arithmetic. LPPSA not among CCRIS reporting institutions: Bank Negara CCRIS page. Checked 10 November 2026. General information, not financial advice; LPPSA's latest notices prevail.
WhatsApp us your net income and the amount approved on your first loan. We work out your remaining second-loan limit, the margin a bank would likely give on a third home, and new launches that fit.