Bank Indonesia (BI) has raised its benchmark interest rate, or BI\nrate, to 5.25 per cent as of May 2026.<\/p>\n
This BI rate increase policy is designed to stabilise the rupiah and\nprevent rapid price inflation on goods and services.<\/p>\n
With the BI rate rising, investment returns are also expected to\nincrease. The expectation is that investors will be tempted to place\nfunds in Indonesia through debt securities, deposits, business\ninvestments, and other instruments.<\/p>\n
When foreign investors exchange US dollars for rupiah, the rupiah\u2019s\nexchange rate will strengthen. However, the interest rate increase will\nimpact a rise in floating interest rates across the banking sector.<\/p>\n
The public will pay higher bank instalments compared with previously,\nsuch as Home Ownership Credit (KPR) payments.<\/p>\n
Although the impact has not been directly felt several days after the\nBI rate increase announcement, the central bank\u2019s decision to raise the\nbenchmark rate is expected to trigger adjustments in commercial KPR\nrates from banks.<\/p>\n
At 12 per cent interest, this comprises the Cost of Funds for Credit\n(HPDK) of 2.83 per cent, overhead costs of 5.69 per cent, and bank\nprofit margin set at 3.48 per cent.<\/p>\n
As a simulation of KPR instalments, as seen from the official Bank\nMandiri website, a customer purchasing a house for Rp600 million with a\n15 per cent down payment of Rp90 million would take out a principal loan\nof Rp510 million, plus a bank provision fee of Rp5.1 million and\nadministrative costs of Rp500,000.<\/p>\n
With a loan term of 15 years and Bank Mandiri\u2019s KPR rate of 12 per\ncent, the monthly instalment a customer must pay is Rp6,120,857.<\/p>\n
In another example, a customer purchasing a house worth Rp500 million\nwith a 20-year tenure and a 15 per cent down payment would face an\nestimated KPR instalment of Rp4.67 million, with a minimum required\nmonthly income of Rp9.36 million.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/bi-rate-rises-to-5-25-per-cent-check-home-loan-instalment-simulation-at-bank-mandiri-1780366848", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }