Housing Loans to Extend Up to 40 Years – Details Revealed

Jakarta, CNBC Indonesia – The Ministry of Housing and Settlement (PKP) has held meetings with heads of housing developer associations to discuss strategic housing sector policies, including plans to implement a 40-year subsidized housing loan term. The meeting forms part of the government’s effort to strengthen collaboration with developers to provide affordable, quality, and environmentally friendly housing for the public. Minister of Housing and Settlement Maruarar Sirait stated the initiative follows President Prabowo Subianto’s directive on a 40-year subsidized housing loan scheme to expand access to decent and affordable housing. Known as Ara, he explained the policy aims to ease payments for low-income households (MBR) to enable more people to own homes. “Following the President’s directive, we are preparing various policies to extend subsidized housing loan terms up to 40 years, making payments lighter and more affordable for the public,” he said on Sunday (31 May 2026). As a simulation, Ara explained that current subsidized home loans priced at Rp166 million for Java and Sumatra with a 20-year term have an average monthly payment of around Rp1.058,000. “With current payments, many labourers, farmers, informal workers, and communities in regions with low minimum wages struggle to afford homes,” he said. However, extending the term to 40 years would reduce monthly payments to approximately Rp773,000. “If monthly payments drop to around Rp773,000, low-income households will have a greater chance of owning homes. This will broaden access to decent housing and accelerate the reduction of the housing backlog,” he stressed. He added that the 40-year term scheme is optional and tailored to individuals’ capabilities. “The 40-year payment option is a choice, depending on individuals’ preferences and financial capacity. People can still select a term that suits their financial ability,” he said. He said the policy is also expected to boost purchasing power and drive growth in the national housing sector. “We want young people, informal workers, labourers, farmers, and low-income communities to have greater opportunities to own homes,” he added. The meeting was attended by REI Chairman Joko Suranto, HIMPERA Chairman Ari, APERNAS JAYA Chairman Andre, and ASPRUMNAS Chairman Syawali. Developers expressed support for government policies aimed at strengthening the national housing sector and expanding public access to housing.