Indonesia to extend mortgage tenor to 40 years to ease payments

Bandarlampung, Lampung (ANTARA) - Housing and Settlement Areas Minister Maruarar Sirait stated that the government plan to extend the house ownership mortgage (KPR) loan tenor to 40 years will ease installments for the public.

"The President has instructed that the KPR tenor be extended from 30 years to 40 years, and of course we will implement it and adjust the regulations accordingly," Sirait said on Thursday.

He said that the planned extension of the mortgage period could help reduce the financial burden of home ownership for the community.

"Of course, this can ease the installments. Currently, subsidized landed houses have installments of around Rp1.7 million (US$106) for a 10-year term and Rp1.4 million (US$87) for a 15-year term," he said.

Sirait explained that installments may be around Rp1.1 million (US$69) for a 20 year term while a 40 year term could lower payments to between Rp800 thousand (US$50) and Rp900 thousand (US$56).

He added that the government is currently coordinating with relevant parties regarding further regulations to support the 40 year mortgage plan.

"The regulation is being prepared immediately. We are formulating the scheme for a 40-year KPR. It also requires communication with developers, consumers, banks, and the entire ecosystem so that the regulation can be implemented properly," he added.

The minister believes that besides easing payments the extension of the mortgage tenor could also expand the national property market.

"This is a form of government support for the people," he stated.

Furthermore the government has been implementing the Three Million Homes Program as part of the mission of President Prabowo Subianto to expand growth from rural areas.

This initiative aims to continue infrastructure development while supporting a more even distribution of economic growth nationwide.