A lock-in period is the first stretch of a home loan during which paying it off in full, by selling or refinancing, triggers an early settlement fee. In the bank documents we checked, lock-ins run 2 to 5 years and the fee is usually 2%; some packages have no lock-in at all. Your letter of offer sets the terms for your loan.
| Bank and package | Lock-in | Early settlement fee |
|---|---|---|
| AmBank home loans | 3 years conventional / 2 years Islamic | 2% of outstanding principal; not charged from 3 January 2025 until further notice |
| Standard Chartered | First 3 or 5 years from the letter of offer | 2% of the approved loan amount |
| UOB step-up scheme for first-time buyers | 5 years from the letter of offer | 2% of the outstanding amount |
| UOB standard scheme | As per letter of offer | A percentage of the original loan or RM5,000, whichever is higher |
| RHB My1 First Home (2022 version) | 5 years from the letter of offer | 2% of the outstanding amount |
| RHB First Home Mortgage (October 2025 version) | None | Not applicable |
| OCBC Manarat Home-i (Islamic) | 3 years from first disbursement | 2% of the financing limit |
| Maybank MaxiHome (January 2025 version) | Not stated in the disclosure sheet; see the letter of offer | As per letter of offer |
| Hong Leong Bank (December 2025 version) | None | Not applicable |
| Bank Islam home financing | None | Not applicable |
Some banks charge on the approved amount, others on the balance still owed.
Illustrative figures: RM500,000 approved, RM480,000 outstanding after two years.
| 2% of the approved amount | RM10,000 |
| 2% of the outstanding balance | RM9,600 |
Some packages do. CIMB's HomeFlexi Smart disclosure sheet (2019 version), for example, adds legal and valuation costs paid by the bank, plus a RM500 processing charge, to the fee for settling within the lock-in. If your package advertises free legal fees, read the lock-in clause alongside it.
Cancelling after accepting the offer but before disbursement can also cost money: Standard Chartered charges 2% of the total facility on packages where it subsidised fees, and RHB's My1 First Home charges 1% of the amount cancelled.
Bank Negara's ibra' guidelines require Islamic banks to give a rebate to every customer who settles early. The rebate is the unearned profit less early settlement charges, and those charges may only cover real costs of settling early, such as an unrecovered discount during the lock-in or unrecovered set-up costs. Profit the bank would have earned had the financing continued cannot be charged.
Bank Negara's Product Transparency and Disclosure policy document (2 December 2024) requires banks to tell you, when you sign, the lock-in period, the charges for settling within it, how they are calculated and when they are due, and how any rebate is worked out.
The notice period is in your facility agreement. HSBC's HomeSmart FAQ, for example, asks for one month's written notice. A redemption statement costs RM50 at Hong Leong, RHB and CIMB; Maybank MaxiHome charges RM50 for the first request and RM100 for each one after.
Thinking of selling or refinancing your Malaysian property? Send me your letter of offer. I'll find the lock-in end date and the likely fee, and plan the sale timeline around it.
The bank's redemption statement gives the exact amount.
Ask Simon on WhatsAppGeneral information only, not financial advice. No bank or product is recommended. Terms are from the versions of each bank's public documents listed above; your letter of offer and facility agreement prevail. See the verification date above.
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