The Government's 40-Year Mortgage Instalment Simulation

The government is examining a subsidised Mortgage Purchase Credit (KPR) tenor scheme up to 40 years. The move is described as aimed at making housing instalments lighter and widening access for low-income households to own decent homes. Housing and Settlement Areas Minister Maruarar Sirait said the policy is a follow-up to the President’s directive to provide more affordable housing for the people. ‘We are also discussing the follow-up to the President’s directive regarding the tenor of subsidised KPR up to 40 years so that instalments are lighter for the public,’ Ara, as he is familiarly known, said, quoted from his Instagram account @maruararsirait, on Tuesday, 19 May 2026.

As a simulation, subsidised housing in Java and Sumatra priced at Rp166 million currently has instalments of around Rp1,058,000 per month for a 20-year tenor. Under this scheme, monthly instalments are expected to fall by about Rp285,000 per month compared with the 20-year tenor. ‘If the tenor is extended to 40 years, instalments could drop to around Rp773,000 per month,’ Ara said.

The government regards the reduction in instalments as opening greater opportunities for groups such as workers, farmers, informal workers, and even young people to purchase their first home. ‘This will widen opportunities for workers, farmers, informal workers, young people, and low-income households to own a decent home,’ he said.

Nevertheless, the government emphasises that the 40-year tenor will not be compulsory. The scheme would be an optional addition that can be tailored to the financial capacity of the public.

In addition to KPR, the government also highlights the importance of housing development that takes environmental quality into account. He said housing development should not only chase the number of units, but also consider environmental sustainability, including a requirement for developers to plant one tree in every house in newly built housing estates.

Previously, President Prabowo Subianto mentioned that the economically weak, such as workers, would be facilitated in home ownership. One measure is to make the KPR instalment scheme as light as possible.