State-owned lender PT Bank Tabungan Negara (BTN) has relaxed its loan to value (LTV) for its housing credit facility since early August, but other banks say they are cautious in dealing with the relaxation.

Even BTN will not offer zero down payment to the debtors, BTN finance director Iman Nugroho Soeko said as reported by tempo.co on Monday. “The lowest down payment is 1 percent,” said Iman.

He said BTN wanted to educate its customers to be responsible for long-term mortgage facility they took. “Taking credit for house ownership is a big decision. Therefore, people need to save money so that they could pay [down payment],” Iman added.

Through the LTV relaxation, Bank Indonesia (BI) gives each bank the authority to decide the amount of down payment based on its management risk.

Private lender Bank Central Asia (BCA) president director Jahja Setiaatmadja said the bank still studied its plan in response to the down payment relaxation. “We may relax the LTV case by case, considering [the profile of] our customers,” he added.

Amid the trend of interest rate increases due to the increase of BI's seven-day reverse repo rate ( 7DRRR ) to 5.5 percent, BCA carefully considered the ability of its customers to pay the installments.

Similarly, CIMB Niaga consumer director Lai Darmawan said down payment relaxation could push credit growth, but the increase of BI's 7DRRR had increased the risk of bad debt. “We want to utilize the relaxation, but it will be based on the risk of each customer,” Lai added. (bbn)