Subsidised Mortgage Tenor Can Reach 40 Years, BTN Responds

PT Bank Tabungan Negara (Persero) Tbk (BTN) has confirmed that banks are capable of disbursing Housing Financing Liquidity Facility (FLPP) subsidised mortgages with tenors of up to 40 years, as the majority of the funding source is provided by the government. BTN Director Hirwandi Gafar stated that this funding scheme enables banks to offer long-term financing to low-income communities (MBR). “For FLPP, whether the bank is strong enough or not, of course, in this case, it is capable. Because the majority of the funding source is provided by the government through the housing financing facility,” Hirwandi said during the ISEI Jakarta Commissariat Perbanas National Seminar in Jakarta on Tuesday.

According to him, this financing is relatively safe for banks as long as the government places the funds in accordance with the credit period granted. “No matter how long, as long as the funds are placed in the bank by the government according to that period, it is quite safe,” he said.

Nevertheless, Hirwandi noted that the implementation of a 40-year tenor must still consider the legal aspects of the land, particularly the validity period of the land title underlying the home ownership. He explained that a Building Use Right (SHGB) certificate has a maximum validity period of 30 years, although it can be extended for 20 years and renewed in accordance with applicable regulations. For flats or vertical housing, he added, the ownership period also depends on the status and duration of the Right to Manage (HPL) or SHGB on the land where the building stands. “The issue is indeed from the certificate period side. If it is SHGB, the maximum period is 30 years, although it can be extended for 20 years,” he said.

He added that this issue does not arise if the house already holds a Freehold Title (SHM) certificate. From the public’s perspective, Hirwandi noted that a longer tenor reduces the monthly instalment amount. However, the total interest paid over the credit period will also be larger. “From the public’s side, they pay more interest. Because the longer the period, the greater the interest paid,” he said.

Previously, the Public Housing Savings (Tapera) Committee meeting approved the implementation of a KPR FLPP tenor of up to 40 years as part of efforts to improve the affordability of subsidised housing for the public. The policy maintains the subsidised housing interest rate at 5 percent for landed houses and 6 percent for flats. The government is targeting the distribution of 350,000 FLPP units in 2026 to support the Three Million Houses Programme. The Tapera Management Body (BP Tapera) recorded that as of 23 July 2026, FLPP distribution had reached 111,537 units with a financing value of approximately IDR 13.87 trillion. Of this total, 71,250 units, or 63.88 percent, were distributed to private sector workers, while 19,254 units, or 17.26 percent, went to self-employed workers.