Using EPF to Buy a House in Malaysia: Account 2 Housing Withdrawal
Edited by Teh Kim Guan, ACMA, CGMA · Updated 2026-06-24
Your EPF savings do not have to sit idle until retirement. Malaysians can tap Akaun Sejahtera (formerly Account 2) to purchase, build, or pay down a residential property right now. This guide walks through every withdrawal type, how much you can take out, who qualifies, and the real tradeoffs to weigh before you apply.
What changed in 2024: three accounts instead of two
On 11 May 2024, EPF restructured member accounts from two accounts into three. Understanding this matters because housing withdrawals only come from one of them.
| Account | Malay Name | Contribution Share | Purpose |
|---|---|---|---|
| Account 1 | Akaun Persaraan | 75% | Retirement only, restricted withdrawals |
| Account 2 | Akaun Sejahtera | 15% | Housing, education, health, Hajj, insurance |
| Account 3 | Akaun Fleksibel | 10% | Flexible cash, withdraw any time |
All six EPF housing withdrawal schemes draw from Akaun Sejahtera. Account 3 (Akaun Fleksibel) cannot be used for housing; Account 1 (Akaun Persaraan) remains locked for retirement.
Six EPF housing withdrawal types
1. Buy House Withdrawal
The most common use: withdraw a lump sum when you sign a Sale and Purchase Agreement (SPA).
How much can you withdraw?
The formula is the lower of:
- (Purchase price minus loan amount) + 10% of purchase price, OR
- Your Akaun Sejahtera balance
The 10% top-up is designed to cover upfront costs like stamp duty, legal fees, and valuation.
Example: You buy a RM 500,000 home with a 90% loan (RM 450,000). The difference is RM 50,000, plus 10% of RM 500,000 (RM 50,000) = RM 100,000 maximum withdrawal. If your Akaun Sejahtera holds RM 80,000, you can take out RM 80,000.
2. Build House Withdrawal
If you own land and are building your own home, you can withdraw to fund construction costs. The maximum is the lower of your estimated construction cost or your Akaun Sejahtera balance. Your land title must be in your name (or your spouse’s, or jointly held).
3. Housing Loan Monthly Instalment Withdrawal
Struggling with monthly repayments? This scheme lets EPF pay your housing loan instalment directly to your bank each month, drawn from Akaun Sejahtera. The monthly amount paid cannot exceed the actual monthly instalment. The instalment period must end before you turn 55. Minimum payment is RM 100 per month for at least six months.
4. Reduce or Redeem Housing Loan Withdrawal
A lump-sum payment to reduce your outstanding loan or redeem it entirely. You can apply once every 12 months, with a minimum withdrawal of RM 500. This is useful when you have a year-end bonus or extra cash and want to reduce your loan principal faster, using EPF as an additional payment channel.
5. Flexible Housing Withdrawal
Introduced in recent years, this scheme does not move cash. Instead, EPF ring-fences your Akaun Sejahtera balance and pledges future monthly contributions to the bank. The bank counts this ring-fenced amount as part of your income when assessing your Debt Service Ratio (DSR), which can lift your loan eligibility.
This is especially helpful for salaried employees whose take-home pay alone falls slightly short of what a bank requires. The ring-fence lasts until you turn 55 or until the loan ends, whichever is earlier. You can only ring-fence for one property at a time, and a minimum savings period of one year applies before activation.
6. PR1MA Housing Withdrawal
For members buying a PR1MA (Perumahan Rakyat 1Malaysia) unit, EPF will pay monthly instalments directly from Akaun Sejahtera to the PR1MA financing body. If the account balance falls below the required monthly payment, EPF will pay whatever is available (subject to a minimum of RM 50).
Core eligibility rules (all schemes)
- Age: You must be under 55 years old when EPF receives your application.
- Nationality: Malaysian citizen or Permanent Resident.
- Minimum balance: At least RM 500 must remain in Akaun Sejahtera after the withdrawal.
- Property type: Residential properties in Malaysia only. Eligible types include bungalows, terraces, semi-detached, apartments, condominiums, SOHOs, studio units, service apartments, townhouses, and shop lots with a residential component (purchased from a developer).
- SPA age: The Sale and Purchase Agreement must not be more than three years old from the date of application.
- Second home rule: If you already used EPF to purchase a first home, you must have sold or disposed of that property before withdrawing for a second home (certain exceptions apply).
How much will early withdrawal cost you?
Before applying, consider the opportunity cost. EPF declared a 6.15% dividend for both Simpanan Konvensional and Simpanan Shariah in 2025 (announced March 2026, per KWSP). At that rate, RM 100,000 left in EPF compounds to roughly RM 134,400 over five years.
The key question is not just “can I withdraw?” but whether the mortgage interest saved (or the property equity gained) exceeds the dividend growth you give up. For most first-time buyers who genuinely need the down payment, the withdrawal makes sense. For members who could fund the purchase without it, the compounding argument is worth modelling.
Application steps
- Log in to i-Akaun at www.kwsp.gov.my. The i-Akaun Secure function (active from January 2025) speeds up the authorisation process.
- Select “Housing Withdrawal” under the Withdrawals menu and choose the relevant scheme.
- Prepare your documents:
- MyKad (front and back)
- Sale and Purchase Agreement (SPA) or Proclamation of Sale from an Administrator or Court
- Housing loan approval letter and Housing Loan Agreement (or Form 16A / Land Title under your name)
- Spouse’s documents if applying for a joint or spouse-assisted withdrawal
- Submit online. For cases that cannot be completed digitally, submit the KWSP Form 9C(AHL) at any EPF branch.
- Wait for processing. Standard processing is 10 to 21 business days from the date a complete application is received.
Comparison: which scheme fits your situation?
| Situation | Recommended scheme |
|---|---|
| Just signed SPA, need to reduce down payment gap | Buy House Withdrawal |
| Building on own land | Build House Withdrawal |
| Loan approved but monthly instalment is tight | Housing Loan Monthly Instalment |
| Have surplus cash, want to cut loan principal | Reduce/Redeem Loan |
| Income slightly below bank’s DSR requirement | Flexible Housing Withdrawal |
| Buying a PR1MA unit | PR1MA Housing Withdrawal |
Key takeaways
- Housing withdrawals come from Akaun Sejahtera (Account 2) only. Account 1 (retirement) and Account 3 (flexible) are not eligible.
- The Buy House withdrawal formula lets you take out the down payment shortfall plus an extra 10% of the purchase price, capped by your Akaun Sejahtera balance.
- The Flexible Housing Withdrawal does not move cash. It pledges future contributions to boost your DSR assessment with the bank.
- You must be under 55 and the SPA must be no more than 3 years old at application.
- Withdrawing now means giving up EPF’s 6.15% dividend (2025 rate) on the withdrawn amount. Model this tradeoff before deciding how much to take out.
- A minimum RM 500 balance must remain in Akaun Sejahtera after every withdrawal.
- Applications go through i-Akaun online with the i-Akaun Secure feature; processing takes up to 21 business days.
Frequently asked questions
Can I use EPF for both the down payment and monthly instalments on the same property?
Yes. You can use the Buy House Withdrawal for the initial lump sum and then apply for the Housing Loan Monthly Instalment Withdrawal to cover ongoing repayments from the same property’s loan. They are separate schemes and can be used together.
What if I have no housing loan and paid cash for the property?
The Buy House, Build House, and Reduce/Redeem schemes all require a formal housing loan from an approved financial institution. Cash purchases are not eligible for most EPF housing withdrawals, as the loan documentation is a required supporting document.
Can my spouse withdraw EPF to help me pay my housing loan?
Yes. A spouse can withdraw from their own Akaun Sejahtera to help reduce or redeem your housing loan, even if they are not a co-borrower. The withdrawal amount is limited to the lower of the outstanding loan balance or their Akaun Sejahtera balance.
Is the withdrawal taxable?
No. EPF withdrawals for housing purposes are not subject to income tax in Malaysia. The withdrawn amount is not treated as income.
What happens to the EPF withdrawal if my loan is rejected later?
You should only apply for the EPF withdrawal after your loan is fully approved (not just in-principle). If your loan falls through after the EPF has already disbursed, you may need to repay the withdrawn amount or negotiate with EPF. To avoid this situation, secure your loan letter before submitting the EPF application.
See all government homeownership schemes for how EPF housing withdrawals sit alongside MyHome, MyDeposit, and Rumah Mesra Rakyat programmes. You may also want to read how home loans and DSR work in Malaysia before deciding how much EPF to deploy.
Malaysia-based chartered management accountant (ACMA, CGMA) and embedded executive who has worked across finance, operations, and product roles with Malaysian companies. Every WangWise guide is checked against official Malaysian sources. How we review · About the editor
Educational content only, not financial advice. Verify current figures with official sources.