Indonesia Extends Subsidized Mortgage Term to 40 Years with Fixed 5% Rate

The Indonesian government approved a new subsidised mortgage scheme that allows repayment periods up to 40 years. The scheme keeps the interest rate fixed at 5 percent for landed house loans and at 6 percent for apartment (rusun) loans, regardless of changes in the Bank Indonesia rate.

The decision was taken by the limited committee of the Badan Pengelola Tabungan Perumahan Rakyat (Tapera) together with Minister of Housing and Settlements Maruarar Sirait, Finance Minister Purbaya Yudhi Sadewa, Labour Minister Yassierli and Tapera commissioner Heru Pudyo Nugroho. Sirait said, “Komite (Tapera) menyetujui untuk 40 tahun bisa dijalankan,” echoing President Prabowo Subianto’s directive to make housing more affordable. The programme targets 350 000 subsidised units and includes incentives such as exemption from land‑and‑building acquisition tax and free building permits.

BP Tapera commissioner Heru Pudyo Nugroho noted that the longer tenor would reduce monthly payments to roughly Rp 500 000‑700 000, expanding access for low‑income families. Islamic Dakwah Fund (IsDF) of the Majelis Ulama Indonesia is mobilising the same scheme to help da’i and Qur'an teachers obtain homes, organising outreach and facilitation events in Banten and other regions.