Map Profile
Helping you buy right
EN

LPPSA home loan 2026: up to RM1 million, no need to settle the first loan, but both loans share one limit and the third home needs a bank

From 4 October 2026 LPPSA changed two big things. Many civil servants heard "RM1 million" and missed the part that says "for both loans together".

How-toBy the PropertySifu EditorialUpdated November 20268 min
The Sifu truth: the short answer

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:

ItemBeforeFrom 4 October
Maximum limitRM750,000Up to RM1 million, tiered by net income
Second loanFirst loan had to be settledNo need to settle; apply with the remaining limit
Rate4%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:

Source: FAQ question 1 attached to LPPSA's notice of 25 September 2026. The full table goes in RM500 steps; excerpt shown.
Net income (RM)Maximum eligibility (RM)
2,500 or less280,000
3,000350,000
4,000480,000
5,000610,000
6,000730,000
7,000800,000
8,000850,000
9,000900,000
10,000950,000
Above 10,0001,000,000

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 incomeRM730,000
Already used on the first loanRM400,000
Second loan at mostRM330,000
Margin while the first is unpaidUp to 90%
So the second home price is aboutUp 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

LPPSABank
Rate4% on the combined amount up to RM750,000, 4.5% above; up to 7% on default and similar casesUsually floats with the bank's reference rate
Maximum marginUp to 100% on the first loanUsually 90% on the first and second; 70% at most from the third
How many loansTwo in a lifetime, sharing one limitNo fixed number; depends on what your income can carry
RepaymentDeducted from salary every monthTransfer or bank auto-debit
Reported into CCRIS?Not on Bank Negara's list of reporting institutionsYes
ValuationJPPH, the government valuation departmentThe bank's panel valuer
Was this guide helpful?

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.

Sources and limits

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.

Used LPPSA once? Let Sifu work out what is left

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.

Work out my LPPSA limit →