Purchasing your first property in Malaysia is a massive step but the drawback is, it does not come cheap! It is the reason why most first-time buyers such as me begin to look into all the financial avenues they can. The one of the most helpful tools I found? Withdrawal of my KWSP Account 2.
Working in Malaysia and paying to EPF (KWSP), you may be already aware that your monthly amount is divided into two accounts Account 1 and Account 2. What is not common knowledge however is that Account 2 can indeed be utilized in helping to pay your house- either by the down payment or lowering your housing loan or even paying the monthly installments.
By 2025, the EPF housing withdrawal scheme will still be gaining momentum since property prices will be high and most young Malaysians will seek ways of being smarter in financing their homes. The process has also been made very smooth due to the digital initiatives that KWSP withdrawals have undertaken. You can even make your withdrawal application online using EPFs i-Akaun which means no more long lines and unnecessary visits to the branch.
Read: Buying Your First Home in Malaysia (2025 Guide): Loans, Stamp Duty & BRIM Explained
I will show you how it all works, based on personal experience.
Here’s the general step-by-step process:
- First, find your property and secure the letter of offer or Sale and Purchase Agreement (SPA).
- Gather the essential documents: your IC, the SPA, the housing loan approval letter, and your latest KWSP statement.
- Log in to your i-Akaun via the EPF website or app.
- Submit the application under “Housing Withdrawal”.
- Wait for KWSP to verify your documents and approve the withdrawal (this usually takes a few working days).
- Once approved, the money will be disbursed—either to your housing loan account or your personal account, depending on the purpose.
It sounds like a formal process, but actually, it is quite manageable when all the documents are in order. In the following section, we shall demystify the best questions that the majority of individuals pose when they want to withdraw their EPF to purchase a house-such as the amount that an individual can withdraw, qualification and risks that should be avoided.
So, let us jump into it.
Q1: Who Is Eligible to Use EPF for a Home Purchase?
The first question I kept asking myself before withdrawing my KWSP money was: can I even withdraw? As it turns out, the eligibility criteria is not that complicated, yet there are a couple of guiding factors which are important to remember, particularly, when you are a Malaysian first-time home buyer.
In order to make a housing withdrawal out of your EPF Account 2, you shall satisfy the following conditions:
- Malaysian citizen or permanent resident (PR)
Only Malaysians or PRs who contribute to the Employees Provident Fund (KWSP) are allowed to participate in this scheme. Expatriates or foreigners are not allowed. - Active EPF contributor
You should be a working person and should be paying EPF. You may not be able to receive it in case you are self-employed or do not make regular contributions. - At least 18 years old
There’s no upper age limit, but you must be at least 18 to apply for the housing withdrawal. - Buying a residential property
This includes landed homes, apartments, condos, or houses under construction. It does not apply to commercial properties or land-only purchases. - First-time or second-time home buyer
The first-time buyers are not the only ones who need it. This can even be your second home but you can still qualify particularly when you have paid off the first loan or you have sold your first house. Nevertheless, first time home buyers in Malaysia may have extra incentives to buy a property with stamp duty exemptions and BRIM (Bantuan Rakyat 1Malaysia) housing assistance depending on your income bracket and the value of the property.
In case of confusion, you can easily verify it through EPF online (i-Akaun) or even visiting the official KWSP portal. Personal experience revealed to me that verifying this information in advance would spare me a lot of headache in the future- particularly in approvals of loans and government rebates.
In case you are working in Malaysia, paying EPF and intend to purchase a house as a residential property, chances are high that you qualify. And you can even have more benefits in the process, especially being a first-time buyer.
Q2: What Types of Properties Can I Buy Using EPF Account 2?
The first time I heard about the use of KWSP Account 2 to purchase a house, I asked myself whether I had any limitations on the kind of house I could purchase. The simple answer is: yes, but they make sense and are aimed at ensuring that Malaysians get long-term and steady accommodation.
1. Residential Properties Only
Account 2 EPF withdrawal is only to be used in purchasing residential properties. This includes:
- Landed houses – terrace, semi-D, bungalows
- Strata-titled units – apartments, condominiums, serviced residences
- Houses under construction – including new launches from developers
You cannot use your EPF funds to buy:
- Commercial properties (e.g. shop lots, SOHO units)
- Industrial buildings or land
- Vacant land (unless it’s bundled with a house construction contract)
I have a specific interest in a serviced apartment, and so long as it is residential-titled (and is not intended to be used as a business) then it is eligible. Just to be on the safer side, you can confirm the title with the developer or agent.
2. First vs. Second Home
Although most individuals believe that this scheme is one that is only applicable to those who are first-time buyers that is not the case altogether. Under EPF you can withdraw:
- Your first home
- A second home, if your previous loan has been fully settled or if the first home has been sold
Another thing you can do is to make withdrawals to clear your current house loan amount in case you are having a mortgage. However, you cannot spend the money to purchase a third house or a property to rent it.
3. PR1MA and Other Government Projects
The more affordable and EPF friendly property options include the PR1MA housing which is meant to cater to the middle-income earners in Malaysia. And in the case of buying a PR1MA unit, the KWSP withdrawals are applied entirely-and with such projects usually enjoy further government incentives such as easy loans or discounts.
Looking to move to a new apartment in a high-rise development, or single-storey house in a suburban township, as long as it is a residential property, KWSP Account 2 can be your financial gateway. In my case, it was a great relief that I did not need to keep my options to the so-called starter homes only- I could be flexible.
Q3: How Much Can I Withdraw from KWSP Account 2?
Among the most common questions that I had prior to making an application towards my KWSP funds withdrawals was, how much should I be able to withdraw? The reply lies in some of these factors but the good news is that, EPF provides you access to a large sum of your Account 2 balance, provided you do it the way it is supposed to be done.
Here’s how it works:
EPF will impose a limit on the amount that you can draw upon withdrawing KWSP Account 2 to purchase a house. The minimum amount that you can withdraw is between:
- The difference between the house price and your home loan amount, OR
- The total balance in your KWSP Account 2
Let’s break that down with an example.
Let’s say:
- Your house price is RM400,000
- Your home loan is RM360,000
- The difference is RM40,000
- Your Account 2 balance is RM25,000
In this instance you can only withdraw RM25,000, since this is the largest amount available in your Account 2- although the price difference is RM40,000.
In case you purchase a house without a loan (e.g. cash purchase), you may withdraw 100 percent of the property cost, or your balance in Account 2 whatever is less.
Can I withdraw more than once?
Yes, you can make many KWSP withdrawals especially when you are settling your loan balance with time. As an example, I had first withdrawn a lump sum to pay the down payment and subsequently I made an application again to lower my monthly repayments. There are, however, some timing and documentation requirements that you will have to fulfill concerning each application.
No limit on lifetime withdrawal but every withdrawal has to be justified using proper documents and has to be in line with the EPF regulations.
Therefore, whether you want to pay in full or on a loan, or refinance later, your EPF savings can continue to assist you along your way of homeownership.
Q4: Can I Use EPF for the Downpayment of a Home?
Yes, definitely, as a first-time home buyer in Malaysia, one of the most intelligent things that you can do to reduce your upfront expense is through paying the down payment using your EPF Account 2. That is what I did and the truth is that it made the difference between someday and owning my own place!
Why the Downpayment Matters
In a majority of home purchases, the banks usually provide up to 90 percent of the property value as finance. The other 10% will form your downpayment and you will be expected to pay it upfront, that is, out of your savings or, more fortunately, out of your KWSP Account 2.
Take as an example that you buy a new house which costs RM350,000:
- Loan approved: RM315,000 (90%)
- Downpayment: RM35,000
- If you have RM20,000 in your EPF Account 2, you can use that towards your downpayment. The rest, if needed, has to come from cash or other sources.
How the EPF Downpayment Withdrawal Works
In case of applying to obtain a KWSP housing withdrawal, one will have the option of using the money in the first purchase; this includes the downpayment. You only need to be ready with the necessary documents:
- Booking/offer letter /Sale & Purchase Agreement (SPA)
- Approval of loan letter
- Your IC and new KWSP statement
All can be done through the i-Akaun portal of EPF and with all your papers in place, the process is surprisingly fast.
What If You Don’t Have Enough in EPF?
Don’t worry — you still have options:
- PR1MA Housing: Offers affordable homes with government incentives, and EPF withdrawals are allowed.
- Rumah Selangorku 2.0: Especially helpful for lower- to middle-income earners, often comes with lower entry costs.
- BRIM (now known under different names like BSH/BPR): May provide financial assistance or stamp duty waivers for eligible first-time buyers.
Although your EPF savings may not be sufficient to take the downpayment in full, even using what you have can save you a lot in the initial cash outlay. This is what did me in, basically, closing the gap between my KWSP Account 2 and investigating housing schemes that benefitted my case.
To a large number of Malaysian people, particularly among the young professionals, this becomes the means of getting their foot on the first rung of the property ladder.
Q5: What Is the Application Process via EPF i-Akaun?
Applying for a KWSP withdrawal used to mean multiple trips to the EPF office, long queues, and piles of paperwork. But now, with EPF i-Akaun, the process is entirely online — and trust me, it’s a game-changer.
I did the whole thing from my laptop, and here’s exactly how it works:
Step-by-Step Guide to Apply via EPF i-Akaun:
- Login to EPF i-Akaun
Visit kwsp.gov.my and log in with your i-Akaun credentials. If you haven’t registered yet, you’ll need to activate your i-Akaun first using your EPF number and mobile TAC. - Go to “Withdrawals” Section
Once inside the portal, click on Withdrawals, then select “Housing Withdrawal”. - Choose the Type of Withdrawal
You’ll be asked to choose whether your withdrawal is for:- Purchasing a new house (individually or jointly)
- Reducing your housing loan
- Building a house on your own land
- Upload Required Documents
The system will prompt you to upload documents like:- Sale & Purchase Agreement (SPA)
- Housing loan approval letter
- Copy of IC
- KWSP statement
- Submit Application
After uploading, review all the details, confirm, and click submit. - Track Your Application
You can monitor your application status directly through i-Akaun under “Withdrawal History.”
As soon as it gets approval, the money will be released to your loan account or to you according to the type of withdrawal. In my case, it was slightly less than a week that I got the approval and I did not even have to visit any of the branches.
Concisely, the whole process through EPF online with the help of i-Akaun is quicker, convenient, and far more transparent. It is a big step towards any individual that uses his or her KWSP withdrawals to purchase a home.
Q6: Can I Withdraw for a Joint Home Purchase?
Yes, you are allowed to use your KWSP Account 2 to buy a house together and this is very useful when you are buying a house with your spouse, parent or child. I did this with one of my family members and combining our EPF savings, it was so much easier to afford the house.
The mechanism behind EPF is as follows: EPF is permitted to make joint buy-outs in case there are joint purchasers, provided that they are all members of immediate family (spouse, parents, or children) and that each of them is an active EPF contributor. In the category of Joint Purchase, both (or all) the parties are allowed to file their own KWSP withdrawal applications.
What’s Required:
- All applicants must be Malaysian citizens or permanent residents
- The property must be under all names listed in the Sale & Purchase Agreement (SPA)
- Each contributor must submit their own supporting documents (SPA, IC, KWSP statement, and housing loan approval)
Let’s say you’re buying a house worth RM500,000 with your spouse:
- Your loan covers RM450,000 (90%)
- The RM50,000 balance can be funded using your combined KWSP Account 2 savings, for things like downpayment or reducing the loan principal
Each one of you will have to submit individual applications of KWSP housing withdrawals, but you may use the same SPA and loan agreement.
This combined withdrawal plan is excellent as it is a better plan, particularly to younger homebuyers who are not yet having sufficient amounts in their EPF but have the backup of their family. It is simply all about making the dream of a house more realizable – with each other.
Q7: What Happens If My House Loan Is Rejected?
One of my greatest fears was this: what happens when my housing loan has not been approved yet after I have submitted an application to withdraw the money from my Account 2 of KWSP? The silver lining to this is that, EPF has a safety net in such situations.
In the event that your house loan is declined, and you have already withdrawn money using your KWSP Account 2, EPF will not run the money. The funds will not be spent, and they will be left in your Account 2.
Here’s What Happens:
- Loan rejection occurs — either due to credit issues, DSR (Debt Service Ratio), or other bank requirements.
- If you’ve already submitted your withdrawal application, EPF online will put your application on hold or cancel it, depending on how far along it is.
- No money is deducted from your Account 2 until all documents — including the loan approval letter — are verified and approved.
- If the application has already been approved before the loan rejection, and the money was released, then:
- For purchases from developers, the money may be returned to EPF by the developer.
- For sub-sale properties, it depends on whether any disbursement has been made; EPF may initiate a refund process.
Personally, I was afraid to post any final documents to i-Akaun until my loan was approved, so I waited. However, in case you are uncertain, then it is advisable to consult with your bank and fix your finances prior to making a KWSP withdrawal application.
Concisely, your KWSP Account 2 savings will not be lost even when your house loan collapses.
Q8: What Are Common Mistakes or Rejections in the Application Process?
Being a first-time home buyer in Malaysia, the idea of putting in a request to withdraw funds through the KWSP may be a tad daunting, particularly when there are so many documents to be filled in. Personally, I found out that even minor mistakes can cause a delay or a complete rejection. These are some of the most frequent causes of rejection of the applications and what you can do to prevent it:
1. Incomplete or Incorrect Documents
It is the most frequent issue. Insufficient pages in the Sale & Purchase Agreement (SPA), incorrect loan reference numbers or even submission of an old KWSP statement may be counted as rejection. Ensure that any document is filled completely with details and readable in the event you are going to send them via i-Akaun.
2. Loan Not Fully Approved
It is dangerous to present your KWSP application even when your loan is not yet approved. KWSP needs an authorised loan approval letter and not a pre-qualification or conditional offer. I did not start my EPF application until my loan offer was signed and stamped and I am happy that I did.
3. Insufficient Balance in Account 2
As long as your KWSP Account 2 does not contain sufficient funds to pay the amount of withdrawal you are applying, your claim will be rejected. You should first know your balance on i-Akaun and determine the maximum that you can withdraw.
4. Expired or Unclear Documents
Any expired documents (such as an old copy of IC or an outdated loan letter), or documents that are scanned badly (blurred or cut off) can also lead to rejection. Ensure that everything that is uploaded is clear, current and of the appropriate file format.
Tips to Avoid Rejection:
- Use the EPF document checklist on their website.
- Confirm your loan status before applying.
- Review your documents twice — once yourself, once with your banker or agent.
- Ensure your i-Akaun profile is active and updated.
Avoiding these simple mistakes can save you a lot of time and stress — and help you move closer to owning your first home without hiccups.
Q9: How Long Does It Take to Receive the Funds from EPF?
Among the most common questions I asked myself and which I suppose other first-time home buyers in Malaysia will ask as well is how long does it really take to receive the money at KWSP?
As far as my experience is concerned, and according to what others have posted on the Internet, the procedure is in fact not as long as people usually anticipate, provided that all your papers are in shape.
General Timeline:
- Application Processing:
After sending your application via EPF online i-Akaun, the processing period of KWSP reviewing and verifying documents takes an average of 5 to 10 working days. It may be even quicker in certain cases, I had my one approved in 4 working days. - Approval Notification:
In case everything is fine, you will get an approval message in SMS or email. You are also able to view the status on your i-Akaun under the “Withdrawal History”. - Fund Disbursement:
After approval, the funds are typically transferred within 1 to 3 working days. Depending on the type of withdrawal, the money may go directly to:
- Your housing loan account (for reducing the loan)
- The developer or lawyer’s client account (for property purchases)
- Your personal bank account (if the terms allow it)
What Users Say:
Majority of the users give smooth and prompt transactions when applying online. The delays tend to occur when documents are not properly filled in, are vague, or when the property is complex (i.e. multi-buyers or property under construction).
Pro tip: To speed up your application, make sure your documents are:
- Clear, complete, and in PDF format
- Uploaded in the correct sections on i-Akaun
- Supported by a valid, approved loan offer
It can take less time than waiting to get your housing loan disbursed, especially when you have done all the preparations!
Q10: Is It Worth Using EPF to Buy a Home?
As a new homeowner in Malaysia, you may think it is a good idea to use your EPF (KWSP) Account 2 balance to purchase a house, and it is a good idea in the case of many people. I financed mine as a downpayment, and without it, I am sure I would have never been able to buy a house as soon as I did. However, just as with any financial choice, there are advantages and disadvantages to take into account.
Pros:
- Reduces upfront burden: Coming up with 10% of the property price for the downpayment can be tough. Using your KWSP savings can ease that pressure.
- Lower monthly commitments: You can also withdraw to reduce your house loan balance, which helps lower monthly instalments.
- Access to your own money: EPF savings are your hard-earned funds. Using them for a home — an appreciating asset — can be a wise long-term investment.
- Available for joint buyers: You and a family member can combine withdrawals to boost your home financing power.
Cons:
- Reduces retirement savings: Every ringgit you withdraw now is a ringgit less for your retirement. If you don’t top it up later, your future nest egg may be smaller.
- Dependent on EPF balance: If your Account 2 doesn’t have much saved yet, the withdrawal might not make a big difference.
- Market risks: If you buy property at a high price and values drop, you may not get good returns — unlike EPF’s relatively stable annual dividend.
My Take:
In my case, the risks were fewer than the gains. EPF helped me get ahead of homeownership opportunities which would not have been possible otherwise. However, ensure that it suits your long-term financial perspective. Yes, it is worth it when being a homeowner gives you stability, not only as an investment.
Conclusion:
To any first-time home buyer in Malaysia, the process of acquiring a house is a daunting experience, but by accessing your KWSP Account 2, you can make the process a lot easier. Your EPF online savings can go a long way in funding the downpayment, paying off your house loan and making your dream house come true with shrewd planning.
Enhance your withdrawal through BRIM 2025, state-level housing assistance or programs such as PR1MA and Rumah Selangorku 2.0. A home loan calculator and MOT (stamp duty) calculator are some of the tools which can help you plan your budget better.
Above all, log in to your EPF i-Akaun, visit the EPF online housing withdrawal page, and collect the correct documents. Take a smart step towards a safe future, and purchase property when you are ready financially, because this will not only be a purchase but an investment into a worthy future.
The home you will be living in first can be even nearer than you imagine.
