Minister PKP confirms 40-year subsidised mortgage tenor agreed and ready for implementation

Minister of Housing and Settlement Areas (PKP) Maruarar Sirait (Ara) stated that the subsidised Home Ownership Credit (KPR) scheme with a tenor of up to 40 years has been agreed upon and is ready for implementation. Ara said the decision was taken during a limited meeting of the Public Housing Savings Management Agency (Tapera) Committee with Finance Minister Purbaya Yudhi Sadewa, Manpower Minister Yassierli, and BP Tapera Commissioner Heru Pudyo Nugroho. “The Committee has agreed that the 40-year tenor can be implemented. Yes, in accordance with the direction of President Prabowo Subianto and fully supporting the President’s direction,” said the PKP Minister after the Tapera Committee meeting in Jakarta on Wednesday. According to him, the committee approved the application of a KPR tenor of up to 40 years as a follow-up to President Prabowo’s directive to provide a more affordable housing financing scheme for the public. He stressed that the government is ensuring the scheme is not only beneficial for the people but can also be operated soundly and sustainably by banks as financing distributors. “We are creating schemes that can be implemented well and benefit the people, and can be operated by the banking sector,” he said. In addition to agreeing on a longer tenor, the government also decided that the interest rate for subsidised landed houses will remain at 5 percent despite an increase in the BI-rate. Ara assessed that maintaining the 5 percent interest rate is a form of government consistency in supporting President Prabowo’s flagship programme to expand public access to subsidised housing. Meanwhile, for subsidised flats, the government has set an interest rate of 6 percent as part of a financing scheme adapted to the characteristics of vertical housing. He also revealed that the government has prepared a quota of 350,000 subsidised housing units and has asked BP Tapera to improve coordination with banks and developers so that this target can be achieved. According to Ara, the government is also providing various incentives, including exemption from Land and Building Rights Acquisition Duty (BPHTB) and free Building Approval (PBG), to accelerate the realisation of the public housing programme. “So, first, the interest rate remains 5 percent for subsidised landed houses; second, the KPR tenor is 40 years; third, 6 percent for subsidised flats. That means we have decided on those three points,” said the PKP Minister.