Property Developer Associations Value 40-Year Mortgage Tenor to Expand Access for Low-Income Communities
Jakarta - Several housing developer associations believe that the mortgage scheme through the Housing Finance Liquidity Facility (FLPP) with a tenor of up to 40 years can expand access to subsidised housing for low-income communities (MBR).
The General Chairman of Real Estate Indonesia (REI), Joko Suranto, stated that the long tenor is a constructive step to help reduce the national housing backlog, which is estimated to be between 9.9 million and 15 million units. “This extended tenor will lower monthly instalments, allowing more people to access housing,” Joko said at the Office of the Ministry of Housing and Settlement Areas (PKP) in Jakarta on Monday.
He added that the extension could also increase the absorption of the FLPP programme, which currently faces various challenges on the ground. Ari Tri Priyante, General Chairman of the Association of Residential and Public Housing Developers (Himperra), noted that the 40-year scheme makes subsidised house instalments much lighter. “Previously, instalments ranged from Rp1.1 million to Rp1.2 million; with 40 years, it drops to around Rp700,000,” said Tri, adding that the scheme helps low-income groups maintain access to subsidised homes.
Meanwhile, the General Chairman of the National Housing Developer Alliance Jaya (Appernas Jaya), Andriliwan Mohamad (Andre), stated that the long tenor and the relaxation of the Financial Services Information System (SLIK) by the Financial Services Authority (OJK) present a major opportunity for low-income communities to own their first home. He noted that monthly instalments of approximately Rp773,000 are far more affordable than before.
Muhammad Syawali, General Chairman of the Central Executive Board of the National House Developer and Marketer Association (Asprumnas), said the 40-year tenor could be a solution for individuals earning below Rp2.5 million per month. “The programme encouraged by the President, reaching a 40-year mortgage tenor, is an excellent solution for many people,” he remarked.
Sid Herdi Kusuma, Deputy Commissioner for Fund Utilisation at the Public Housing Savings Management Agency (BP Tapera), explained that government simulations show a 40-year tenor can reduce subsidised house instalments to approximately Rp773,000 per month. The simulation used a Zone 1 subsidised house priced at Rp166 million with a financing ceiling of approximately Rp160.34 million. According to BP Tapera’s simulation, FLPP mortgage instalments are Rp1,058,173 per month for a 20-year tenor, Rp860,740 for a 30-year tenor, and as low as Rp773,154 for a 40-year tenor.
Sid noted that the scheme is designed to reach low-income workers, including those in the agricultural sector. Data from the National Labour Force Survey (Sakernas) by BPS, used by BP Tapera, shows the average income for agricultural workers is around Rp2.43 million per month. The simulation also utilised 2026 minimum wage data for various regencies, such as Banjarnegara (Rp2.32 million), Wonogiri (Rp2.33 million), Sragen (Rp2.33 million), and Blora (Rp2.34 million). Sid added that the maximum repayment capacity for the public remains within the 30-33 per cent range of income, even with the extended 40-year tenor.
The government previously targeted the construction and financing of 350,000 subsidised houses by 2026 through the FLPP programme. The Minister of Housing and Settlement Areas, Maruarar Sirait (Ara), stated that the 40-year tenor is one of the options being prepared by the government to provide broader financing access. “The public will still be given the choice whether they want 10, 15, 20, 25, 30, or up to 40 years,” said Ara.