In Indonesia, a mortgage is a financing solution to give access to indonesian future home owner to obtain easily acced access to their own properties with the help of indonesian banks or financial instititution dealing with property financing.
In Indonesia home financing is necessary to the majority of the indonesian population as it is almost impossible for many indinesian households to afford a full payment for a new property without using a loan.
In Indonesia, obtaining a mortgage is a better option for indonesian families than paying a rent during an entire life, however the challenge remains on getting approval for a Indonesian mortgage given some families low income and the absence of any collateral, downpayment or guarantee.
The Indonesian mortgage market is about to gain some more momentum given the recent relaxation of the LTV or Loan to Value ratio by the Bank of Indonesia im order to curb this type of financing. The LTV is the loan an indonesian bank can approve towards the value or the property which reflects at the end the amount of the downpayment required by a an indonesian bank.
In Indonesia, in terms of mortgage the changes affecting the LTV have impacted the future indonesian home owners positively as indonesian banks now ask for a minimum of 15 % equity or downpayment called also deposit to obtain approval for the acquisition of an indonesian property.