Mortgage Holders Give Up on Payments, Developers Propose This

The increase in mortgage instalments after the promotional interest period ends is one of the risks faced by commercial home buyers. The size of the instalment increase can make the payment burden far different compared to when the consumer first took out the mortgage. This has left many mortgage holders unable to continue paying their instalments. Some are even willing to offer a unit takeover at a price lower than the instalments they have already paid. Some are offering a free takeover.

Chairman of the National Association of Housing Developers and Marketers (ASPRUMNAS), Syawali Pratama, believes there needs to be a clearer limit on floating mortgage interest rate increases. The aim is to ensure consumers do not face an excessive jump in instalments in the middle of the credit period. “Government policy is indeed needed, particularly in the housing sector. There need to be limits — what the bottom is, what the upper is. If it goes down, that may not be possible, but if it goes up, a maximum of two times, that might be a good proposal. Or one and a half times,” Syawali told CNBC Indonesia on Thursday (27/8/2026).

According to him, banks essentially implement the provisions agreed with consumers in the credit agreement. Therefore, the issue is not simply about blaming the bank or the consumer when instalments change after the floating rate takes effect. The mechanism for the increase is usually already stated in the documents signed by the consumer. The problem arises when the increase occurs gradually and eventually makes the instalments far exceed the borrower’s initial capacity.

“For example, there is a bank policy with a one- to two-year promotion, where the instalment is lower. In the third year it does go up. That is in the details of the agreement at the time of the sale and purchase agreement and the signing of the credit approval confirmation. So that is when the increase happens, for example in the third or fourth year it goes up,” he said.

The situation can become even more difficult when the benchmark interest rate or banks’ cost of funds also rises. The instalment burden that consumers could initially calculate can change after several years into the credit period. He gave an example of how an initial instalment of Rp3-4 million could change to Rp10 million in subsequent years, burdening consumers.

“In the fifth year it may continue to rise, in the sixth year it may be added to by the SBI rate or rising interest rates, so banks automatically raise it. The bank is not wrong, and the consumer certainly does not want it either. This means government policy is indeed needed, particularly in the housing sector,” said Syawali.

For developers, certainty regarding financing schemes is also important for maintaining the housing ecosystem. Instalment increases that are too sharp could cause consumers to lose their ability to pay and ultimately choose to give up their homes. “This is very necessary, government intervention is very much needed. The housing sector is one of the sectors that must be maintained and protected. Its ecosystem must be maintained. If it is not maintained and not controlled, then those limits are indeed needed — what the bottom is, what the upper is,” said Syawali.