Zero Deposit Scheme: Your Land Is Your Deposit
No need to save tens of thousands of ringgit in cash to get started. The land you already own acts as your equity, so you can build without a cash deposit to the contractor. We also say honestly what you still have to pay — so there are no surprises later.
- Cash deposit to us
- RM0
- LPPSA rate
- 4.00% fixed
- Bank margin
- up to 90%
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- There is no cash deposit to the contractor: the land you already own acts as your equity.
- That works when the bank applies its margin (up to 90%) to the completed value, land plus house; ask your bank in writing which basis it uses.
- If the bank lends on the lower of value and contract price, part of the contract price is not financed at the start.
- LPPSA uses no margin: it approves the lowest of four figures at a fixed 4.00%, and you pay any difference (wang beza) first.
- You still pay third-party costs: stamp duty, legal fee and valuation come to about RM8,357 in the worked example.
How it actually works
When you buy a house from a developer, you need a deposit because you own nothing in the transaction — the bank finances 90% and you cover 10%.
Building on your own land is fundamentally different. You already own the land, and the land has value. Where a financier values the completed property (land plus house) and finances up to its margin of that figure, your land's value is already in the equation, so the part you have to “cover” can already be covered — without a single new sen of cash. Not every bank lends on that basis, so ask yours, in writing, which one it uses.
A simple example
Your land is valued at RM150,000. The build costs RM400,000. The completed property is estimated at RM550,000. If the bank applies a 90% margin to that completed value, it can finance up to RM495,000 — more than the RM400,000 build cost. The remaining 10% is treated as covered by your land equity, so no cash deposit is needed to start building.
These figures are illustrative. The real valuation is done by a registered valuer, and the margin is set by the financier. This example assumes the bank applies its margin to the completed value (land + house). Not every bank does: some cap a construction loan at a share of the lower of market value and the construction contract price, and on that basis your land does not fund the contract price. The next section shows both.
For civil servants, LPPSA works differently: there is no margin percentage. It approves the lowest of four figures (the construction agreement price, JPPH's valuation, the amount you apply for, and your maximum eligibility, up to a limit of RM1,000,000) at a fixed 4.00%, and releases stages against JPPH progress reports. If the approved amount is below the contract price, you pay the difference (“wang beza”) first, before LPPSA releases anything.
Two ways a bank sets the margin, and why it decides whether you need cash
“Up to 90%” tells you nothing until you know 90% of what. Bank product sheets for building on your own land use one of two bases, and the difference is the whole question of a deposit.
- Basis A: a share of the completed value
- The bank values land plus the finished house and lends up to its margin of that figure. The value of land you already own sits inside the calculation, so the loan can reach the full contract price without extra cash. This is the mechanism the rest of this page describes.
- Basis B: a share of the lower of value and contract price
- The bank lends up to its margin of the market value or the construction agreement price, whichever is lower. Your land is still the security, but it no longer counts towards the price: at 90%, the other 10% of the contract price is not financed. The AFFIN Home Build product disclosure sheet, for example, caps a construction-only loan at 90% of the lower of open market value and construction cost, with MRTA, stamp duty and legal fees counted inside that 90%.
The same house under both bases
Estimator figure for a single-storey Gold house of 1,500 sq ft, with council approval and permanent meters, at the top of its range (rates effective 2026-09-23): RM410,500. Land worth RM150,000, so an assumed completed value of RM560,500.
| Basis and margin | Maximum loan | Not financed |
|---|---|---|
| A: 90% of completed value | RM410,500 | RM0 |
| A: 80% of completed value | RM410,500 | RM0 |
| A: 70% of completed value (third housing loan) | RM392,350 | RM18,150 |
| B: 90% of contract price | RM369,450 | RM41,050 |
| B: 80% of contract price | RM328,400 | RM82,100 |
- Under basis A the loan stops at the contract price, which is why the maximum at 90% and 80% is the same RM410,500: a bank finances the build, not the land you already own.
- Bank Negara caps the margin at 70% on a borrower's third outstanding housing loan (in force since November 2010). If you already have two housing loans, plan with the 70% row. First and second homes are at each bank's own internal margin.
- Under basis B, “no deposit” can only mean that someone other than the bank carries the unfinanced part at the start. Ask the bank which basis it uses before you sign anything, and ask in writing how the unfinanced part is handled in your case.
LPPSA: no margin, but four figures and a JPPH valuation
LPPSA's construction financing (Jenis 2) does not use a margin percentage, so your land's value is neither a deposit nor a factor. It can finance up to the whole construction agreement price, but only if JPPH's valuation and your eligibility both reach that price. MRTT/MRTA cover and the legal fee for the financing documents are financed on top of your eligibility; stamp duty cannot be financed. How LPPSA picks the lowest figure.
What you still have to pay
This is the part usually left out of “zero deposit” adverts. None of it is paid to us — these are third-party costs — but it is real money and you should plan for it.
- Legal fees & stamp duty
- The financing and charge documents involve legal fees and stamp duty. Some banks offer packages that absorb these costs; ask specifically.
- Property valuation
- Banks need a report from a registered valuer. LPPSA has its own valuation process.
- Outstanding quit rent
- Any quit rent arrears must be settled before the council submission and before the financing is approved.
- Insurance
- Fire insurance and usually mortgage reducing insurance (MRTA/MRTT) or the equivalent takaful.
- Items outside the scope
- Fencing, landscaping, air-conditioning and furniture are not covered by construction financing, so they come out of your pocket after handover.
Legal fees, stamp duty and valuation grow with the size of the loan: for the example on this page they come to several thousand ringgit, worked out below, and insurance comes on top. The exact figure depends on the financing amount, the bank's package and the law firm — but we will tell you the real estimate at quotation stage, before you commit.
Third-party costs for the same example, worked out
The same example with a bank loan of RM410,500 (basis A, 90%). These are published scales, not quotes: the lawyer, the valuer and the bank set the real figures, and tax and disbursements come on top.
- Stamp duty on the loan documents RM2,055
- Ad valorem duty on the principal loan instrument: RM5 for every RM1,000 of the loan or part of it (0.5%). Secondary documents are usually a nominal RM10 each.
- Lawyer's fee for the financing documents RM5,131
- Solicitors' Remuneration Order 2023 scale: 1.25% of the first RM500,000, 1% of the next RM7 million. The reduced scale in Table B is only for purchases governed by the Housing Development Act, which a build on your own land is not.
- Valuation fee RM1,171
- Valuers' scale on an improved-value basis: 0.25% of the first RM100,000 and 0.2% of the rest, on the completed value. Some banks absorb it; ask.
- Interest while the house is being built RM735 / month
- A bank charges interest only on the amount released so far. At 4.30% (our planning assumption, as at 2026-09-23), halfway through the releases that is about RM735 a month, rising to about RM1,471 once everything is released. If you are still renting, that is on top of your rent.
Stamp duty, legal fee and valuation together: about RM8,357, before tax, disbursements, fire insurance and any MRTA/MRTT premium, which depends on your age, the amount and the cover you choose.
- A bank may let you add these costs to the loan (some product sheets allow an extra 5% on top of the 90% for exactly this). That removes them from your pocket today and adds them to the balance you pay interest on for the whole tenure.
- The first-home stamp duty exemption is written for buying a home under a sale and purchase agreement. A loan to build on land you already own has no such agreement, so do not plan on it; ask your lawyer whether any exemption applies to your documents.
- Permanent electricity and water meters appear as their own line in our estimator. TNB, for example, may hold a deposit of two months' estimated usage, refundable when the account is closed.
Who qualifies
- Land in your name. Individual or joint title, not an inheritance that has not been divided.
- A land category and conditions that allow a home. Agricultural land needs its conditions changed first.
- Enough income for the instalments. No deposit does not mean no income check — the DSR and instalment caps still apply.
- A clean credit record. CCRIS and CTOS are checked. Active arrears are the most common reason for being turned down.
- Registered road access to the site. Without it, the plans will not be approved.
Two of these five you can check yourself right now: land readiness and financing eligibility.
Free guide, in Malay
Panduan Mudah: LPPSA Financing for Civil Servants
Our team's 36-page guide: the seven types of LPPSA financing, who qualifies, the documents, takaful cover and legal fees, in plain Malay.
Download the guide (PDF, 5.3 MB)Written in November 2025, the book gives the old RM750,000 limit. LPPSA has since announced RM1,000,000.
Financing through our panel
Golden Sharp Innovation (IP0580950-X) is a registered panel contractor with the institutions above. Panel status means our credentials as a contractor have been assessed, and our progress-claim documents follow the format these institutions expect — it is not a guarantee that your financing will be approved, and not an endorsement of our services by them. Approval and terms are determined entirely by LPPSA or the bank concerned. Logos and trademarks are the property of their respective owners.
For the detail-minded
Further reference
The rules and details behind the guide above. Open only what applies to you.
How to judge any “no deposit” offer, including ours
Six questions that show where a cost missing from the front of a deal went: the unfinanced part, the price, the rate, payments outside the schedule, the conditions and your buffer.
A cost that disappears from the front of a deal usually reappears somewhere else. These are the questions that find it.
- Who carries the unfinanced part?
- If the bank uses basis B, some part of the contract price is not financed at the start. Ask who pays it, when, and what happens to it if the bank's valuation comes in low.
- Has the cost moved into the price?
- Compare the contract price with an independent estimate. Bank Negara found that houses sold with developer interest-bearing schemes could be priced up to 30% higher than the same houses without them, and that buyers were mostly not told. A deposit waived by raising the price is not free.
- Has the cost moved into the rate?
- “Zero entry cost” packages exist, and they are real, but they are priced. One bank's published zero-entry-cost home financing is quoted from SBR + 1.65%, against SBR + 1.45% on its standard product. Over 30 years the difference can outweigh the fees it saved you.
- Is any money asked for outside the stage schedule?
- LPPSA pays against JPPH progress reports and banks release against certified progress. A request for cash that is not tied to a stage in the payment schedule deserves a written explanation.
- Does the headline still hold when the conditions are read?
- Under the Consumer Protection Act 1999, a price indication is misleading if it implies the price does not depend on conditions it in fact depends on, or that it covers something for which an extra charge is made. A fair “no deposit” offer states its conditions next to the claim.
- Can you still afford it without a buffer?
- Bank Negara's responsible-financing rules require the bank to confirm your income after statutory deductions, necessities and other debts covers the instalment. Passing that check means the bank thinks you can pay; it does not leave you a cushion. Keep one of your own.
Frequently asked
So is “zero deposit” true or not?
How much does the land need to be worth?
Does LPPSA offer this too?
Can I use family land that is not in my name?
Can the legal fees and stamp duty go into the loan?
I already have two housing loans. Does anything change?
What is the real risk of this scheme?
Check whether it works for you
Tell us your land's location and size, and your approximate income. We work out whether this scheme really covers the build you want — and tell you if it does not.