In Indonesia, a mortgage loan is defined by loan facility that is offered by Indonesian financial institutions to give the possibility to an Indonesian future home owner to purchase a house or a flat.

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, obtaining a home loan 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 loan 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 ( explanation: 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.

In Indonesia the required down payment dedicated to the purchase of homes has been reduced to 15% from initially 30% and for subsidized credits and acceptable, requested equity can reach 10%. Preconditions are set by banks for housing loans in the country:

  • - Borrower should be aged minimum 21 years and maximum 55 years,
  • - Purchased house or flat is provided with a land title.