Mortgage Guarantee Programme (MGP)

A credit risk, portfolio and capital management tool for mortgage lenders and enhances home ownership in Malaysia.

About the Programme

Empowering lenders and Islamic financier, enhancing home ownership

The Mortgage Guarantee Programme (MGP) serves as a credit risk, portfolio, and capital management tool for mortgage providers/financiers (originators), while enhancing access to home ownership in Malaysia. Through the MGP, Cagamas SRP provides first-loss guarantee coverage on a specified portion of the loan or financing value, allowing originators to transfer the associated credit risk to Cagamas SRP while retaining the underlying mortgage assets on their balance sheets.

The MGP offers mortgage guarantee facilities for both conventional mortgage loans and Islamic house financing portfolios.

For Islamic house financing, the MGP provides guarantees on facilities granted by Islamic Financial Institutions to their customers. The structure complies with Shariah principles, specifically Kafalah (guarantee) and Wakalah (agency).

Choose A Product Type To Explore More

Conventional

Islamic

MGP

Conventional Product Details

Product Description

Cagamas SRP will provide ‘first loss’ protection to mortgage originators in Malaysia on a portfolio basis.
No individual loan may be taken out from the mortgage portfolio under protection, except in cases such as full redemption/prepayment or amortisation that reduce the outstanding principal balance below the protection threshold amount.

Guarantee Coverage

Current loan-to-value (CLTV) ratio of the mortgaged property as at the guarantee date is not more than 95%.
Initial guarantee amount is the difference between the current loan amount and the protection threshold amount (e.g., 79.9% of mortgaged property value as at guarantee date).The guarantee amount will reduce in accordance with the individual loan amortisation schedule which will be determined at the guarantee date.
The guarantee amount is the difference between the “scheduled” outstanding principal balance and the protection threshold.

Termination of Protection

Protection will be terminated upon:

The “scheduled” outstanding principal balance of the loan falls below the protection threshold amount (e.g., 79.9% of the property value as at Guarantee Date) by way of repayment/prepayment in full or loan amortisation.
Non-compliance with Representation, Warranty and Eligibility Criteria.
Non-payment of guarantee fee by the originator.
Payment of guarantee amount by Cagamas SRP to the originator.

Guarantee fee

Guarantee fee is either a one-off payment for the entire protection tenure or on an annual basis paid by the originator.
Guarantee fee is quoted as a percentage of the total outstanding principal balance of the reference portfolio.