Indonesia maintains 5% interest rate for subsidized housing loans despite BI Rate hike

Indonesia's government has affirmed its commitment to keeping the interest rate for subsidized housing loans, known as the Fasilitas Likuiditas Pembiayaan Perumahan (FLPP), at a stable 5%. This decision holds firm even as the central bank, Bank Indonesia, has raised its benchmark interest rate (BI Rate).

Minister of Public Housing and Settlements Maruarar Sirait emphasized that the government is present and supports its citizens, particularly those with low incomes. He stated that the 5% flat rate for FLPP loans will be maintained until the end of the loan term. This ensures that low-income individuals can still access affordable and decent housing, despite economic fluctuations and the rising BI Rate.

Sirait also confirmed that the government will proceed with the FLPP mortgage tenor of up to 40 years, as directed by President Prabowo Subianto. Discussions with relevant parties are ongoing to implement this policy. The government is also collaborating with Danantara and the State-Owned Enterprises (BUMN) to optimize housing assets and support the national target of providing 3 million homes by 2026.

To date, 78,277 housing units have been financed through FLPP, representing 22.36% of the 350,000-unit target by 2026. The government and Danantara are also addressing issues related to the Meikarta housing project, including land legality and pricing, to facilitate its socialisation to the public. Additionally, discussions are underway for a Presidential Instruction (Inpres) to expedite solutions for strategic issues in the housing sector.