EBF - Reducing Your Housing Loan

One way to reduce the amount of interest charged on your housing loan is to reduce your principal amount as quickly as you can. This also helps you to settle your loan faster, or if you choose to, reduce your monthly payment.

The choice is yours: reduce your repayment period and save on interest payment; or reduce your monthly payment and have a bit more to spend every month. You can also work out with the bank to have a bit of both. Of course this is subject to any conditions imposed on the loan. Some corporate loans (loans obtained through your employer), for example, do not allow borrows to change the monthly payment amount.

Regardless of your preferences, EPF allows members to withdraw part of their savings for this purpose. This is either to reduce the member’s own housing loan or that of his/her spouse’s.

Withdrawal for reducing a housing loan is applicable once a year, one year after the original withdrawal (for buying or building a house) was made. The subsequent withdrawals are only applicable to the same loan.

Should you refinance the house, withdrawal to reduce housing loan is only applicable to the original balance of the original loan.


Withdrawal to Reduce / Redeem Housing Loan
This withdrawal allows you to utilize your savings from Account 2 to reduce or redeem the balance of your’s or your spouse’s housing loan taken from a financial institution approved by the EPF for the following mode of purchase or construction of a house:

Individual purchase; OR
Joint purchase with spouse, family members or other individuals; OR
Withdrawal to reduce / redeem the balance of housing loan of the second house is allowed after the first house purchased utilizing EPF withdrawal has been sold or disposal of ownership of property has taken place. Disposal of ownership refers to 'loss of ownership of the first house owned by you either due to auction, surrender of property by court order, transfer of ownership because of love and affection, destruction of house due to natural disaster, abandoned housing project or cancellation of purchase.


Application Eligibility

A Malaysian Citizen; OR
A Malaysian Citizen who has made Leaving The Country Withdrawal before 1 August 1995 and has opted to re-contribute to the EPF; OR
A Non-Malaysian Citizen who:
Has become an EPF member before 1 August 1998; OR
Has obtained a Permanent Resident status (PR).
You have not reached the age 55 at the time the EPF receives your application; AND
You have a minimum savings balance of RM500.00 in your Account 2.


Enquiry
Should you have any enquiry, or require additional information regarding this withdrawal, kindly contact:

Any EPF Office nearest to you;
The EPF Call Management Centre (CMC) at: 03-8922 6000;
Online feedback: Enquiry
Please quote your EPF membership number or your Identity Card number and the type of withdrawal that you have applied for when you contact the EPF. You are encouraged to contact the EPF directly for assistance and advice. You may also read further in this website to obtain more information regarding all available EPF withdrawals and general guide to members.



Amount Withdrawn Not To Be Utilized For Other Purposes
An amount withdrawn shall be utilized solely for the purpose for which the withdrawal was authorized. Where all of the amount withdrawn or any part of the amount is not utilized for the purpose for which such withdrawal was authorized, the member shall return all the amount or the part which is not utilized to the EPF within six months from the date of withdrawal. Any member who contravenes this requirement shall be guilty of an offence.

Please click the link to read more about Amount withdrawn not to be utilized for other purposes (hyperlink)


Submission Of False Application

Any application received and found to contain false information or forged documents will be deemed to have committed an offence under Section 59 of the EPF Act and if found guilty shall be liable to imprisonment for a term not exceeding three years or to a fine not exceeding ten thousand ringgit or to both.