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BTN wants to halve subsidized mortgage tenures, says borrowers can repay faster
State-owned lender said most borrowers are able to repay their mortgages within a decade.
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An aerial view shows a subsidized housing complex at Puuwatu district in Kendari, Southeast Sulawesi, on August 1, 2024. (Antara/Andry Denisah)
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tate-owned lender Bank Tabungan Negara (BTN) has proposed shortening the tenure of subsidized mortgage loans (KPR) from 20 years to 10, noting that most borrowers are able to repay their mortgages within a decade.
The shorter tenure would be targeted at lower-income households that qualify for the program.
BTN Subsidized Mortgage Division head Budi Permana said on Thursday that based on repayment data, the change was feasible.
“We have data showing that 20 years is a long time for a subsidized mortgage, and, in reality, most loans are repaid within 10 years,” Budi said, as quoted by Kompas.com.
Read also: Prabowo plans to build, renovate 3 million homes annually
Many low-income household borrowers had seen their financial situation improve within a decade, Budi pointed out, indicating they had “moved up” and were no longer classified as low-income.
“Therefore, they no longer require subsidies. The funds can be allocated to others who need them more,” he added.
