OJK states banks tend to be selective in mortgage debtor valuations
Jakarta (ANTARA) - The Financial Services Authority (OJK) observes that the banking sector is currently tending to be more selective in the underwriting process for mortgage (KPR) debtors to ensure their future ability to make payments.
Nevertheless, the authority ensures that from a credit risk perspective, the non-performing loan (NPL) ratio for mortgage distribution remains historically manageable at around 3 per cent.
“It is recorded that in March 2026, the mortgage NPL ratio was 3.14 per cent, demonstrating that banks possess effective risk management amidst current economic conditions,” stated OJK Executive Head of Banking Supervision, Dian Ediana Rae, in a written response in Jakarta on Monday.
OJK noted that, generally, mortgage distribution by banks in March 2026 still recorded positive growth of 4.79 per cent year-on-year (yoy). However, mortgage performance during this period was relatively slower compared to the previous year’s growth, which saw double-digit expansion of 16.31 per cent (yoy).
Based on segmentation, this slowdown in mortgage distribution occurred across almost all house types, particularly for type 21 properties, which slowed significantly compared to the previous year.
Regarding several banks recording single-digit mortgage growth, Dian stated that this development reflects the banking sector’s commitment to maintaining prudential banking principles and alignment with each bank’s specific risk appetite.
“In general, credit growth must be supported by other factors that can bolster public purchasing power, especially the public’s ability to sustain instalment payments,” said Dian.
She added that the current growth phenomenon indicates that banks are adjusting their strategies to ensure credit distribution remains high-quality amidst global economic dynamics.
With the support of various government programmes combined with the authority’s policy mix, Dian stated that this will serve as a strong driver for banks to expand credit and enhance their intermediation functions, including driving mortgage growth.
Such government programmes include the continuation of incentives, such as Government-Borne Value Added Tax (PPN DTP), as well as innovative housing finance schemes.
Dian added that OJK continuously encourages banks to remain optimal in their role as agents of development. In this regard, banks can optimise support from government policies and the policy mix while remaining mindful of risk appetite and prudential banking aspects.
“The banking sector continues to maintain its liquidity, which primarily originates from third-party funds (DPK) or public funds. Banks also understand the application of risk management in managing public funds, as there is a moral responsibility for banks in managing funds that can be channelled into productive activities, such as the distribution of credit/financing, including mortgages,” said Dian.