1. What is Rent-to-Buy?

Rent-to-Buy is a property purchase scheme in Malaysia where you pay monthly installments that combine rental and purchase payments. It allows buyers to occupy the property while gradually purchasing it.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

Where:

• \( Purchase\ Price \) — Total property price in MYR
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Total number of monthly payments (years × 12)

Explanation: The formula calculates the fixed monthly payment needed to fully amortize the loan over the specified term.

3. Importance of Payment Calculation

Details: Accurate payment calculation helps potential buyers assess affordability and plan their finances before committing to a rent-to-buy agreement.

4. Using the Calculator

Tips: Enter the full purchase price in MYR, annual interest rate in percentage, and loan term in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the typical interest rate for rent-to-buy in Malaysia?
A: Rates vary but are typically 1-3% higher than conventional mortgage rates, often between 5-8% annually.

Q2: Are there other fees involved in rent-to-buy?
A: Yes, there may be legal fees, stamp duty, and processing fees. Some agreements include maintenance charges.

Q3: Can I negotiate the purchase price in rent-to-buy?
A: The price is usually fixed in the agreement, but some contracts allow for price renegotiation after certain periods.

Q4: What happens if I can't keep up with payments?
A: This varies by contract but typically results in forfeiture of payments made and eviction from the property.

Q5: Is rent-to-buy better than traditional mortgage?
A: It can be beneficial for those who can't qualify for mortgages immediately, but generally more expensive in the long term.