How to Calculate LPPSA Instalments: Formula & Examples
Pasukan RumahHQ · Published 25 September 2026 · Updated 29 September 2026 · 9 min read
In brief
- LPPSA eligibility is the lowest of the instalment cap (60% or 50%), the 80% total debt cap, what your tenure supports and the table cap for your income.
- Net income is basic pay plus the fixed allowances LPPSA counts, minus mandatory deductions; other allowances such as overtime are not counted.
- Instalments use the reducing-balance formula at 4% a year. Every example here is an estimate only; approval is subject to LPPSA.
This guide is for you if you want to work out your LPPSA instalment and eligibility by hand, and understand where each number comes from. If you just want the answer, use our LPPSA eligibility calculator: it does every step below in seconds. Once you understand the formula and the rules, you can check the calculator’s result and know what to change to raise your eligibility.
This guide explains the rules in LPPSA’s Housing Financing Guidelines Bil.1/2026, step by step, with three worked examples.
Estimates only. General information, not financial advice. Approval and the actual amount are subject to LPPSA.
Want to calculate straight away?
Our eligibility calculator works out the instalment cap, the total debt cap, tenure and LPPSA's eligibility table, then shows which limit applies to you. No data leaves your browser. Open the eligibility calculator.
Four things that decide LPPSA eligibility
The Guidelines (paragraph 6.1) state that the eligibility amount follows the eligibility table in Appendix 1, subject to the instalment cap and the total debt cap, “whichever is lowest”. Tenure then decides how much financing that instalment can support. So there are four things:
| Rule | First financing | Second financing |
|---|---|---|
| Monthly instalment cap | No more than 60% of net income | No more than 50% of net income |
| Total debt cap | No more than 80% of net income | No more than 80% of net income |
| Tenure (pension scheme) | Up to 420 months or age 90, whichever is earlier | See the Guidelines |
| Tenure (EPF scheme) | Up to the end of service or 420 months, whichever is earlier | See the Guidelines |
| Eligibility table | Maximum by net income band (Appendix 1) | |
Net income (paragraph 4.29) is basic pay plus fixed allowances, minus the mandatory deductions LPPSA takes into account. The fixed allowances counted are listed in Appendix 1, among them ITP/EPW, ITKA/ITKT/ITK, COLA/BIW/BIS/BISS, ITJU and acting allowances. Allowances that are not fixed are not counted.
Step by step: how to work out LPPSA eligibility
- Work out net income Basic pay + qualifying fixed allowances − mandatory deductions.
- Work out the instalment cap 60% of net income for a first financing (50% for a second); our calculator also deducts other commitments here (see the note).
- Work out the total debt cap 80% of net income, minus all other monthly commitments.
- Take the lowest That is your maximum instalment.
- Set the tenure By scheme (pension or EPF), age and the 420-month limit.
- Turn the instalment into a financing amount Use the reducing-balance formula at 4% a year.
- Check the eligibility table If the amount exceeds the cap for your income band, the table cap applies.
A note on steps 2 and 3: two ways to read the 60% cap. Paragraph 6.1 of the Guidelines Bil.1/2026 says that, for a first financing, “the monthly instalment does not exceed 60% of net income and total debt does not exceed 80% of net income, whichever is lower” (our translation). It does not say whether other commitments are deducted from the 60% cap. So there are two readings: (1) the cautious reading, which our calculator uses: commitments are deducted from both the 60% and 80% caps; (2) the literal reading: the 60% cap applies to the LPPSA instalment alone, and other commitments are deducted from the 80% cap only. With no other commitments, both readings give the same answer. LPPSA decides the actual amount. Estimate only. Example 2 below shows both readings.
The LPPSA instalment formula
LPPSA charges a fixed 4% a year on a reducing balance for financing up to RM750,000. The monthly instalment uses the standard annuity formula:
Instalment = P × r ÷ (1 − (1 + r)−n)
- P = financing amount
- r = monthly rate = 4% ÷ 12 = 0.003333
- n = number of months (for example 35 years = 420 months)
A full worked example: the instalment on RM300,000 over 35 years at 4% (about RM1,328 a month)
Example: the instalment on RM300,000 over 35 years (estimate only)
P × r = RM300,000 × 0.003333 = RM1,000.
(1 + r)−420 = 0.2472, so 1 − 0.2472 = 0.7528.
Instalment = RM1,000 ÷ 0.7528 ≈ RM1,328 a month. Over 35 years, total profit paid is about RM257,900.
To find the financing amount from an instalment (the other direction), the formula is P = Instalment × (1 − (1 + r)−n) ÷ r. That is what the calculator does when you enter your pay.
| Financing amount | 20 years | 25 years | 30 years | 35 years |
|---|---|---|---|---|
| RM200,000 | RM1,212 | RM1,056 | RM955 | RM886 |
| RM300,000 | RM1,818 | RM1,584 | RM1,432 | RM1,328 |
| RM400,000 | RM2,424 | RM2,111 | RM1,910 | RM1,771 |
| RM500,000 | RM3,030 | RM2,639 | RM2,387 | RM2,214 |
Financing above RM750,000 is worked out in two portions: 4% on the first RM750,000 and 4.5% on the balance, under LPPSA’s 2026 initiative. According to LPPSA’s announcement (September 2026), the official opening date for applications under the new limit has not been announced (checked 29 September 2026); check LPPSA’s official website. The details are in LPPSA financing limit 2026.
The maximum eligibility table (Appendix 1)
Even if your instalment could support a large amount, LPPSA caps financing by net income band:
| Monthly net income | Maximum eligibility |
|---|---|
| RM6,500 and above | RM750,000 (up to RM1,000,000 under the 2026 initiative) |
| RM6,000 | RM720,000 |
| RM5,700 | RM680,000 |
| RM5,500 | RM650,000 |
| RM5,000 | RM600,000 |
| RM4,700 | RM560,000 |
| RM4,500 | RM540,000 |
| RM4,300 | RM510,000 |
| RM4,000 | RM470,000 |
| RM3,800 | RM450,000 |
| RM3,500 | RM420,000 |
| RM2,900 | RM340,000 |
| RM2,300 | RM270,000 |
| Up to RM1,700 | RM200,000 |
Three worked examples
All names and figures below are hypothetical. Estimates only.
- The eligibility tableExample 1: the instalment could support about RM521,000, but the RM4,300 band is capped at RM510,000.
- The instalment cap and commitmentsExample 2: the RM600 car instalment limits the LPPSA instalment to RM1,860 a month.
- TenureExample 3: only 12 years until service ends at 60 makes tenure the main limit.
Three hypothetical examples: the eligibility table (Encik Amir), existing commitments (Puan Siti) and a short tenure (Encik Rahman) are each the limit
Example 1: the eligibility table is the limit (Encik Amir, 32, EPF scheme)
Net income: basic pay RM3,600 + fixed allowances RM1,200 − mandatory deductions RM500 = RM4,300. No other commitments.
60% instalment cap: RM2,580. 80% total debt cap: RM3,440. The lowest: RM2,580.
Tenure: service ends at 60, so 28 years (336 months).
Amount supported: RM2,580 a month for 28 years at 4% ≈ RM521,000.
Eligibility table: the RM4,300 band is capped at RM510,000. So the estimated eligibility is RM510,000, with an instalment of ≈ RM2,526 a month.
Example 2: existing commitments are the limit (Puan Siti, 40, pension scheme)
Net income: RM4,100. Car instalment RM600.
60% instalment cap less commitments: RM2,460 − RM600 = RM1,860. 80% total debt cap less commitments: RM3,280 − RM600 = RM2,680. The lowest: RM1,860 (our calculator's cautious approach).
Tenure: pension scheme, 420 months (to age 75, under the age-90 limit).
Amount: RM1,860 a month for 35 years at 4% ≈ RM420,000. The table cap for the RM4,000 band is RM470,000, so the instalment cap is what limits her.
If Puan Siti settles her car loan first, her instalment cap rises to RM2,460 and the RM470,000 table cap becomes the limit instead. On the literal reading (commitments deducted from the 80% cap only), her maximum instalment is RM2,460 even with the car loan still running, so the RM470,000 table cap is the limit. LPPSA decides the actual amount.
Example 3: a short tenure is the limit (Encik Rahman, 48, EPF scheme)
Net income: RM5,200. No other commitments. 60% instalment cap: RM3,120.
Tenure: only 12 years until service ends at 60.
Amount: RM3,120 a month for 144 months at 4% ≈ RM356,000, well below the RM600,000 table cap for the RM5,000 band. Over 25 years, the same instalment could support ≈ RM591,000. For older EPF-scheme applicants, tenure is the main limit.
After the eligibility figure: what else affects the final amount
- Price and valuation. The approved amount does not exceed the property price or JPPH valuation, whichever is lower, even if your eligibility is higher.
- Insurance and legal fees. Paragraph 6.4 states that the eligibility amount excludes MRTA/MRTT, LTHO and legal fees for the financing documents. These can be financed on top, so the actual instalment is slightly higher.
- Homes under construction. For Type 3 financing, money is released to the developer by construction stage. For landed homes, salary deductions start after the 95% progress payment or in the 25th month from approval, whichever is earlier.
- Applicant conditions. A citizen, a permanent officer confirmed in service with at least one year of service. Contract staff are not eligible.
Our calculator or LPPSA’s?
LPPSA itself provides a Kalkulator Anggaran Pembiayaan (financing estimate calculator) on its MyFinancing portal. Use both. Ours adds two things: it shows which limit applies to you (instalment cap, total debt, table or tenure), and it lists every assumption used, including the rate date. Both are estimates only.
Common mistakes when calculating
- Entering gross pay. LPPSA uses net income, not gross pay.
- Including allowances that do not count. Only the fixed allowances listed in Appendix 1 are taken into account.
- Forgetting other commitments. Personal loans, car loans and credit cards reduce the room under the 80% cap.
- Assuming tenure is always 35 years. Under the EPF scheme, tenure ends when service ends.
- Assuming the RM1 million limit applies to everyone. Only the top net income band can go above RM750,000.
Next steps
Read how to apply for LPPSA for a developer home for the application sequence, documents and the Head of Department’s role, and the LPPSA page for a summary of the scheme. If you are comparing LPPSA with a bank, see how to calculate a home loan and what DSR is.
RumahHQ Development Sdn Bhd is registered on the LPPSA, CIMB Bank and Maybank panels. Make an estimate with the eligibility calculator, then register interest and ask for help checking your eligibility. Registering interest is free and non-binding. Estimates only; approval is subject to LPPSA.
Questions
Does an LPPSA calculator give my actual approved amount?
No. Any calculator, including ours and the Kalkulator Anggaran Pembiayaan on LPPSA's MyFinancing portal, gives an estimate only. The actual amount is decided by LPPSA after it assesses the full application.
What is net income in LPPSA's calculation?
LPPSA's Guidelines Bil.1/2026 define net income as basic pay plus fixed allowances, minus the mandatory deductions the Board takes into account. The fixed allowances counted are listed in Appendix 1, such as ITP/EPW, ITKA, COLA and ITJU.
What is LPPSA's profit rate?
4% a year on a reducing balance for financing up to RM750,000. Under the 2026 initiative, the balance above RM750,000 up to RM1 million is charged 4.5%. The official opening date for applications under the new limit has not been announced (checked 29 September 2026); check LPPSA's official website.
Why is my eligibility lower even though my salary is high?
Usually because one of the other limits is lower: large existing commitments, a short tenure because you are close to retirement, or the eligibility-table cap for your income band. Our calculator shows which limit applies.
Are MRTA premiums and legal fees included in eligibility?
The Guidelines state that the eligibility amount excludes MRTA/MRTT cover, LTHO and legal fees for the financing documents. These costs can be financed on top of it, so the actual instalment may be slightly higher.
Can I apply to LPPSA before a project launches?
A formal Type 3 application needs an SPA or draft SPA, so it is made after launch. Before that you can make an estimate and prepare documents. Registering interest with RumahHQ is free and non-binding.
Sources
(5)
- LPPSA, Garis Panduan Pembiayaan Perumahan LPPSA Bil.1/2026 — read 2026-09-29
- LPPSA, Inisiatif Baharu LPPSA 2026: Penambahbaikan Had Kelayakan Pembiayaan Perumahan — read 2026-09-25
- LPPSA MyFinancing, Kalkulator Anggaran Pembiayaan — read 2026-09-25
- LPPSA, Pekeliling Pembiayaan Perumahan LPPSA Bil.1/2026 — read 2026-09-25
- LPPSA MyFinancing, Financing eligibility conditions (FAQ) — read 2026-09-25
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