Indef: Subsidised Mortgage Interest Rates Must Be Maintained for Low-Income Homebuyers

Economist Eko Listiyanto from the Institute for Development of Economics and Finance (Indef) has stated that the interest rate for subsidised mortgages (KPR) needs to be maintained at 5 percent to remain affordable for low-income communities (MBR) amidst global geopolitical uncertainty. “Because this is housing provision for MBR, I believe the ability to pay the instalments must be safeguarded,” Eko said in Jakarta on Tuesday (23/6/2026).

According to him, the policy of maintaining the subsidised mortgage interest rate is quite a relief for consumers. Government support is necessary to ensure that KPR interest rates remain accessible to low-income earners. “In my view, this is one of the steps to ensure that the ability to pay instalments is maintained for MBR, because this programme is indeed intended for MBR,” Eko stated.

For context, Minister of Housing and Settlement Areas (PKP) Maruarar Sirait has confirmed that the interest rate for subsidised housing will not increase and will remain at a flat rate of 5 percent from the beginning to the end of the instalment period. Maruarar, familiarly known as Ara, said that despite the increase in the BI Rate, the government is maintaining the Housing Financing Liquidity Facility (FLPP) interest rate at 5 percent so that people can obtain housing with affordable instalments.

“We are ensuring that the state is present and takes sides with the people, especially low-income communities. Despite economic dynamics and the increase in the BI Rate, the FLPP interest rate is maintained at 5 percent so that people continue to have access to decent and affordable housing,” Ara said.

Regarding the progress of FLPP distribution in 2026, out of a target of 350 thousand housing units, realisation to date has reached 78,277 units, or approximately 22.36 percent of the annual target. Ara assessed that the KPR housing financing programme with the FLPP scheme is in high demand among developers and makes it easier for the public to own liveable homes. He added that the existence of housing financing through KPR FLPP is a concrete step by the government to encourage the public to own liveable and affordable homes. Banks and housing developers have also frequently requested that the Ministry of PKP continue the KPR FLPP programme to support the success of the 3 Million Houses Programme, in line with the vision and mission of President Prabowo Subianto.