40-Year Mortgage Tenor Could Smooth Path for 3 Million Homes Programme, With Caveats

The policy of extending the instalment period (tenor) for public housing loans (KPR) from 20 years to 40 years is believed to be capable of driving the success of the three million homes programme. The Regional Board of Real Estate Indonesia (DPD REI) Jambi assesses that the tenor extension policy will make monthly instalments lighter, thereby enabling more low-income people to qualify for their first home. “This (programme) is also expected to increase the absorption of subsidised housing and support the success of the 3 Million Homes programme,” said DPD REI Jambi Chairman Abror Lubis in Jambi on Monday, 6 July 2026. However, he provided a note for the programme to be successful: its implementation must be accompanied by a faster KPR approval process, administrative ease, and banking support so that the benefits are truly felt by the public and developers. For the government’s new policy on KPR for low-income communities (MBR) with a maximum tenor of 40 years to accelerate the realisation of the 3 million homes programme, “Perhaps what is more important is how banks can recognise the pension income of prospective housing loan debtors from the MBR segment,” Abror explained. Jambi Governor Al Haris responded that the new policy is a breakthrough addressing the problems of lower-middle-class communities in accessing low-cost housing credit. He noted that the current financial condition of the public remains the main obstacle to accessing home ownership, especially the issue of high down payments and instalments making it difficult for people to obtain housing. Therefore, the KPR tenor policy is expected to be an effective long-term solution for meeting the housing needs of the people in Jambi. In addition to the extension of the repayment period, Al Haris also highlighted the importance of adjusting the interest rates applied by banks, providing dispensation when a customer’s economic condition is declining. Previously, the policy to extend the instalment period was decided at a Tapera Committee Meeting attended by Minister of Housing and Settlement Areas (PKP) Maruarar Sirait, Minister of Finance Purbaya Yudhi Sadewa, and Minister of Manpower Yassierli at the Directorate General of Treasury Building of the Ministry of Finance. The decision is a follow-up to President Prabowo Subianto’s directive to expand access to home ownership for the public, especially those on low incomes.