Is a 30-year mortgage repayment really at risk of boosting non-performing loans?

The government plans to extend the tenor of Mortgage Purchase Loans (KPR) to 30 years, raising questions about potential increases in non-performing loans (NPLs) or bad debt risk. However, SMF’s Chief Financial and Risk Management Officer Bonai Subiakto argues that a longer tenor could actually enhance affordability and access to housing finance. He explains that the main aim of extending the KPR tenor is to boost affordability as well as access for people to obtain a home. ‘With the same interest rate, a longer tenor will surely lower the instalments. As a result, more people will be able to access KPR,’ Bonai said at a press conference in Jakarta on Wednesday, 4 March 2026. He added that lighter instalments also help people plan their long-term finances. With a longer tenor and relatively stable instalments, people are seen as having more room to manage their expenditures. Regarding NPL risk, Bonai assessed that extending the tenor to 30 years does not have a direct correlation with an increase in NPL. He explained that problematic loans are generally more related to a drop in purchasing power or economic conditions affecting borrowers’ ability to repay. ‘NPLs are usually more linked to the purchasing power of the people. When income falls or an economic shock occurs, that typically affects credit quality,’ he said. In addition, he added that year-on-year income growth can help maintain borrowers’ ability to pay, while instalments remain relatively stable due to the longer tenor. Nevertheless, Bonai acknowledged that extending the KPR tenor requires adequate sources of long-term funding. He emphasised that one of SMF’s primary roles is to provide long-term financing for the housing finance sector to address potential tenor misalignment. This effort is carried out through various schemes, including disbursing long-term funds and risk sharing with investors through financing instruments in the financial market. Bonai added that experience during the Covid-19 pandemic showed that the quality of housing financing remained relatively stable despite economic pressures. Consequently, Bonai assessed that the 30-year KPR tenor policy could actually create greater stability for both debtors and financing institutions.