Indef: Subsidized Mortgage Rates Must Be Kept Affordable for Low-Income Households

An Indonesian economist is urging the government to maintain subsidized mortgage interest rates at 5% to keep housing affordable for low-income earners amid global geopolitical turmoil. Eko Listiyanto, an economist at the Institute for Development of Economics and Finance (Indef), stressed the importance of ensuring borrowers can manage their loan repayments.

"This is about providing housing for low-income communities, so I believe the ability to pay installments needs to be maintained," Eko said in Jakarta on Tuesday. He noted that the government's continued support for subsidized mortgage rates offers significant relief to consumers.

Minister of Public Housing and Settlement Areas Maruarar Sirait affirmed that the government would not increase the interest rate for subsidized housing, keeping it at a flat 5% from the beginning to the end of the loan period. "We ensure the state is present and sides with the people, especially low-income communities," Sirait stated. He added that even with rising BI rates, the government is maintaining the 5% interest rate for the Housing Liquidity Facility (FLPP) to ensure accessible and affordable housing.

Regarding the FLPP program's progress in 2026, 78,277 housing units have been disbursed, representing 22.36% of the annual target of 350,000 units. Sirait believes the FLPP mortgage scheme is highly popular among developers and simplifies homeownership for the public. He described the program as a concrete step by the government to encourage citizens to own decent and affordable homes.