With progressive payment in Malaysia, you pay for an off-plan condo in stages as construction is certified, not all at once. Under the standard Schedule H format, you pay 10% when you sign the SPA, then 10% for foundations, 15% for the structural frame and smaller stages after that, with 17.5% due at vacant possession and the last 7.5% tied to title and the defect period. Your bank pays the stages it covers, and you pay only interest on the amount released so far, so monthly costs start low and rise as the building goes up.
If you are buying a new launch condo in Johor Bahru, progressive payment is the part of the deal that shapes your cash flow for the next three to four years. Our step-by-step guide to buying a new launch in JB walks through the whole journey from booking to keys. This article goes deeper on one stage of it: how the money actually moves during construction, how much interest you can expect to pay before you get the keys, and how to plan for each bill, with a worked example you can adapt to your own numbers.
What is progressive payment in Malaysia?
Progressive payment is a system where the purchase price of an under-construction property is paid in instalments linked to construction milestones. The developer can only bill you once a stage is finished and certified by its architect or engineer.
For residential strata projects under the Housing Development (Control and Licensing) Act, the stages and percentages are fixed in the statutory sale and purchase agreement known as Schedule H (Schedule G is the landed version, and since 2015 the two use the same percentages). Many serviced apartments on commercial title, which is the format of most new JB city projects, use a payment schedule closely modelled on it. Either way, the exact schedule that applies to you is the one printed in your SPA, so read it page by page with your lawyer.
The idea protects both sides. You are not paying for work that has not been done, and the developer receives funds as it builds.
The progressive payment schedule: stage by stage
The standard Schedule H schedule has twelve stages adding up to 100% of the purchase price. Here is what each one covers and who typically pays it when you take a 90% loan.
| Stage | Milestone | % of price | Cumulative | Paid by (90% loan) |
|---|---|---|---|---|
| 1 | On signing the SPA (deposit, including booking fee) | 10% | 10% | You |
| 2 | Foundation of the building | 10% | 20% | Bank |
| 3 | Structural framework | 15% | 35% | Bank |
| 4 | Walls with door and window frames in place | 10% | 45% | Bank |
| 5 | Roofing, wiring, plumbing (without fittings), gas piping, telecom trunking | 10% | 55% | Bank |
| 6 | Internal and external finishes | 10% | 65% | Bank |
| 7 | Sewerage works | 5% | 70% | Bank |
| 8 | Drains | 2.5% | 72.5% | Bank |
| 9 | Roads | 2.5% | 75% | Bank |
| 10 | Vacant possession, water and electricity ready for connection | 17.5% | 92.5% | Bank |
| 11 | On delivery of title (strata: transfer with the strata title) | 2.5% | 95% | Bank |
| 12 | Held by the developer’s solicitor as stakeholder | 5% | 100% | Bank |
Two stages often surprise first-time buyers. The vacant possession stage is the single largest payment after the deposit, at 17.5%. And the final 5% is not paid to the developer straight away: it is held by the developer’s solicitor and released in two halves, 2.5% at eight months after vacant possession and 2.5% at the end of the 24-month defect liability period, provided defects you reported have been certified as fixed.
How the bank pays each stage and what you pay
Once your loan is approved and the loan agreement is signed, the bank pays each progress claim directly to the developer. You are not handed the loan money; instead the bank releases it stage by stage, and your loan balance grows each time.
Your share comes first
Banks generally expect you to pay your own portion before they release anything. With a 90% loan, your share is the 10% deposit, so the bank starts from stage 2. With a lower margin, your share is larger and covers more stages. For example, a 70% loan (the maximum Bank Negara Malaysia allows for a third housing loan) means you pay the first 30% yourself: the 10% deposit, the 10% foundation stage and 10 of the 15 percentage points of the structural stage. The bank then pays the rest of stage 3 and everything after.
What the notice must show
Each bill comes as a written notice from the developer with the architect’s or engineer’s certificate confirming the stage is complete. Under Schedule H the purchaser has 30 days from receiving the notice to pay. If you forward claims to your bank promptly, the bank handles payment within that window.
Late payment interest
If a stage you are responsible for is paid late, Schedule H allows the developer to charge late interest of 10% per year, calculated daily. A developer cannot charge late interest on a notice that is incomplete or missing the required certificate. In practice, late interest is easy to avoid: forward every notice to your bank the day it arrives and keep copies.
Progressive interest: how much you pay before getting the keys
During construction you pay interest only on the amount the bank has released, not on the full loan. This “progressive interest” starts small after the foundation stage and rises as the building goes up. Full instalments of principal plus interest usually begin once the loan is fully released around vacant possession.
The worked example below uses round, illustrative numbers so you can see the shape of the costs. It is not the price of any specific project, and it assumes an interest rate of 4% a year; your rate depends on your bank and on the Overnight Policy Rate, which was 2.75% in September 2026.
| Stage reached (illustrative month) | Loan released | Monthly interest at 4% | Months at this level | Interest in this period |
|---|---|---|---|---|
| SPA signed (month 0) | RM0 | RM0 | 6 | RM0 |
| Foundation (month 6) | RM50,000 | about RM167 | 12 | about RM2,000 |
| Structure (month 18) | RM125,000 | about RM417 | 6 | about RM2,500 |
| Walls (month 24) | RM175,000 | about RM583 | 4 | about RM2,333 |
| Roof and M&E (month 28) | RM225,000 | RM750 | 4 | RM3,000 |
| Finishes (month 32) | RM275,000 | about RM917 | 2 | about RM1,833 |
| Sewerage (month 34) | RM300,000 | RM1,000 | 1 | RM1,000 |
| Drains (month 35) | RM312,500 | about RM1,042 | 1 | about RM1,042 |
| Roads (month 36) | RM325,000 | about RM1,083 | 4 | about RM4,333 |
| Vacant possession (month 40) | about RM450,000 (fully released) | Full instalment of about RM1,992 a month over 35 years | ||
Assumptions: purchase price RM500,000, 90% loan of RM450,000, 4% a year, stages spaced across a 40-month build. Total progressive interest before vacant possession in this example is about RM18,000. Compare that with paying a full instalment of around RM1,992 from day one, and you can see why progressive payment is gentle on cash flow during the build.
What changes the total
- Build speed. A faster build means fewer months of interest but an earlier full instalment.
- Interest rate. Every 0.25 percentage point moves the monthly interest at each stage by about 6%.
- Loan margin. A smaller loan delays the first bank release and lowers interest at every stage.
- Timing gaps. Long gaps between stages keep interest flat at a low level; a cluster of stages close together raises it quickly.
How long does the construction period last?
For Schedule H projects, the statutory agreement sets vacant possession within 36 months of the SPA date. Some serviced apartment SPAs set a different period, for example measured from the approval of the development plans. Always check the delivery clause in your own SPA.
For EXSIM’s Johor projects, published timelines give a sense of the horizon. Causewayz Square began piling in September 2025, awarded its main building contract in January 2026 for a 34-month programme in five phases, and targets completion around 2030; see our Causewayz Square completion date guide. The Asteriaz and The Celestz in Kebun Teh are expected in 2029–2030. Large multi-tower projects are often billed tower by tower, so your stage dates depend on which tower you buy in.
How to check a progress claim when it arrives
Each progress claim deserves a quick two-minute check before you forward it. Doing this every time keeps your records clean and makes the final reconciliation at vacant possession easy.
- Stage and percentage. Match the stage named on the notice to the schedule in your SPA, and confirm the percentage is applied to your SPA price.
- Certificate attached. The notice should include the architect’s or engineer’s certificate for that stage.
- Running total. Add the new claim to the stages already billed. The cumulative figure should match the table in your SPA.
- Payer. Note whether the stage falls within your own share or the bank’s, and forward it the same day.
- Bank confirmation. Ask the bank to confirm when it has paid, and keep that confirmation with the notice.
On a multi-tower project, stages are usually certified per tower or phase, so a friend in another tower may receive bills at different times. That is normal.
Planning your cash flow during construction
A simple plan for each phase keeps progressive payment stress-free.
- Before the SPA. Set aside the 10% deposit, plus legal fees and stamp duty for the SPA and loan agreement. Our separate guide to stamp duty and legal fees in Johor breaks these down.
- Years one to two. Interest is low, often a few hundred ringgit a month in a mid-priced example. This is a good time to build a buffer for furnishing.
- Year three. Interest rises as walls, roof and finishes are billed. Budget for the higher figure, not the current one.
- Around vacant possession. The full instalment starts. At the same time you pay maintenance fees, sinking fund, utility deposits and furnishing. If you plan to rent the unit, it may take a few months to fit out and find a tenant, so plan for overlap.
- After handover. Report defects within the 24-month defect liability period; the stakeholder sum is linked to them being fixed.
If you plan to rent out the unit, our rental yield guide shows how to fold instalments and running costs into your return calculation.
Tips for Singapore and overseas buyers
Many JB buyers live in Singapore, and progressive payment works the same way for them. A few habits help.
- Give your lawyer, your bank and the developer a reliable email address and a Malaysian contact address so notices are not delayed.
- Keep your own share (the deposit and any portion above the loan) in ringgit ahead of each due date, so exchange-rate moves do not catch you at a bad moment.
- Set up a standing arrangement to pay monthly progressive interest from a Malaysian account.
- Keep a simple tracker of each stage: notice date, amount, date forwarded to the bank and date paid.
Foreign buyers in Johor face additional steps such as state consent and a higher minimum price, which our JB buying process guide covers.
Is progressive payment better than paying in full?
For most buyers, progressive payment is the more comfortable option. You keep cash available during construction, your interest cost is small in the early years, and you only pay for work that has been certified.
Paying cash avoids interest altogether, but it ties up capital for several years in an asset you cannot yet use or rent. Many investors prefer to keep that cash for other purposes and accept the modest progressive interest. The right choice depends on your savings, other commitments and plans. For a personalised payment illustration for Causewayz Square, The Asteriaz or The Celestz, or the latest SPA price list, WhatsApp us.
Sources
- MHub: Progress billing mechanics under Schedules G and H
- MHub: Vacant possession and handover billing
- Bank Negara Malaysia: OPR and housing loan rules
- iProperty: What is the Housing Development Act?
- EdgeProp: Causewayz Square project news
This guide is general information, not financial advice.