Consumers' Mortgage Market: A Tale of Consumers' Confusion?

The study is to investigate the mortgage consumers' shopping behavior and factors affecting their decision in choosing housing loan in Malaysia. It is also intended to investigate whether mortgage consumers are well-protected under the current regulations. To achieve the objectives, the data has been collected by means of questionnaires. Questionnaires were distributed to mortgage consumers who took up the mortgage between years 2007 to 2011. The results show that consumer choose interest rate or profit rate as the most important factor. However, interest rate or profit rate is not a priority factor in determining their loan selection criteria. Loan duration or financing duration is their first priority for loan or financing selection criteria. Consumers' confusion is related to the level of interest rate while the real determinant factor of obtaining a mortgage is the affordability of consumers to service the monthly installments. Developers appeared to be the most important sources in which consumers seek information pertaining to mortgage choice. The finding show that there are fair disclosures provided to consumers as mandated by Bank Negara Malaysia.