Low OPR reduces borrowing costs, helps people own homes - MOF

The lower Overnight Policy Rate (OPR) is expected to support homeownership affordability through reduced debt servicing costs, according to the Finance Ministry.

It said existing homeowners with floating-rate loans will generally enjoy lower monthly instalment payments.

This will also provide financial space to support other expenses. Homebuyers will also stand to benefit from lower new loan rates, in line with the OPR reduction.

"However, other factors, including the borrower's risk profile, will determine the overall cost of the loan," the ministry said in a reply posted on the Parliament website yesterday.

It was replying to Senator Ros Suryati Alang in Dewan Negara on whether the reduction in the OPR by 25 basis points to 2.75 percent by Bank Negara Malaysia in July 2025 would increase home ownership.

The Finance Ministry said home ownership is influenced by housing prices, including the availability of affordable housing, as well as households' ability to repay housing loans.

The ministry said data showed that the majority of new homes launched were outside the maximum affordable price range, with only 31.6 percent of the total units launched in 2024 priced below RM300,000.

These excessively high house prices are beyond the income capabilities of households, thus reflecting the imbalance between demand and supply in the housing market.

Limited or insufficient income and savings among households are also major factors that prevent home ownership.

In this regard, the government, in collaboration with Bank Negara and financial institutions, has implemented various initiatives to increase the ability of the people to own a home, including the Housing Credit Guarantee Scheme to obtain financing facilities for first homes.

- Bernama

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