The short answer
When you buy an under-construction new launch in Malaysia, you do not pay the full price upfront and you do not wait until handover to pay everything either. You pay progressively, in line with construction stages set by a statutory schedule. Your bank releases your loan to the developer in instalments as each stage is certified complete, and you only service the portion that has been drawn down so far. Your monthly payment therefore starts small and climbs as the building goes up.
Schedule H vs Schedule G
Progressive payment for housing developments is governed by the Housing Development (Control and Licensing) Act (the HDA) and its sale and purchase agreement schedules:
- Schedule G — landed property sold with an individual title (terraces, semi-Ds, bungalows).
- Schedule H — strata property sold under a master title and later subdivided (condominiums, serviced residences, apartments) where you share common property.
Most high-rise new launches you will see advertised fall under Schedule H. Both schedules break the price into pre-set percentages tied to construction milestones.
How the stage releases work
After you sign the SPA and your loan is approved, the developer requests payment as each stage is reached and certified. A typical strata sequence runs roughly like this (the exact percentages are fixed by the schedule in your SPA):
| Stage | Trigger |
|---|---|
| Booking / SPA signing | Upon signing the sale and purchase agreement |
| Foundation & structural work | Substructure / superstructure completed |
| Walls, roof, plumbing & wiring | Internal and external works progressing |
| Internal finishes & fittings | Doors, windows, finishes installed |
| Practical completion / CCC | Vacant possession with Certificate of Completion and Compliance |
| Final retention | Released after the defect liability period considerations |
Each time a stage is certified, your bank disburses that slice of the loan directly to the developer. You do not handle the money — your job is to make sure the loan is in place and your instalments are paid.
When your instalments actually start
This is the part buyers most often misunderstand. On a progressive-release loan, you do not pay the full monthly instalment from the first day. You pay only on the amount released so far:
- Early in construction, only a small portion is drawn, so your payment is small.
- As more stages are certified, more loan is released and your payment steps up.
- Once the project is complete and the loan is fully drawn down, you pay the full instalment.
Plan your cash flow for this ramp-up, especially if you are renting elsewhere while you wait for keys.
Interest during construction
Because the loan is released in stages, interest accrues only on what has been drawn — so interest during construction is real but modest early on and grows as releases continue. Some buyers choose to service this interest as it accrues; others have it capitalised, depending on the loan package. Confirm exactly how your bank treats interest during construction before you sign the loan, as it affects your monthly outflow during the build.
A brief word on DIBS
You may still hear about DIBS — the Developer Interest Bearing Scheme — where the developer absorbed the interest during construction so the buyer effectively paid little until completion. It was popular years ago but was discontinued for residential property because it fuelled speculation and masked the true holding cost. Treat any "pay nothing until keys" pitch with caution and read the actual SPA and loan terms; do not assume DIBS-style absorption is on offer today.
Who this suits / who should think twice
Progressive payment suits you if: you are comfortable with a 2–4 year build timeline, you can manage a payment that ramps up over time, and you want to lock in a unit early in a development.
Think twice if: you need a home to move into now, you cannot comfortably carry both rent and rising instalments during construction, or you are uncomfortable with construction-timeline risk.
Risk checklist before you commit
- Confirm whether your SPA is Schedule G or Schedule H and read the stage percentages.
- Check the developer's track record on delivering past projects on time.
- Ask your banker exactly how interest during construction is charged and whether your instalment ramps up or stays level.
- Budget for the cash-flow ramp — early small payments rising to the full instalment at completion.
- Verify there is no reliance on a discontinued or unwritten "interest absorption" promise.
If you would like the stage-by-stage payment profile mapped against your own budget for a specific launch, message CK and we can walk through the schedule together.