Zero Down Payment for Property Loans, How Effective is It?

By Editorial Team 22/02/2021
Housing
Summary

Bank Indonesia (BI) issued a policy to ease down payments on property loans, included in the Financial System Stability Committee (KSSK) policy package. BI Governor Perry Warjiyo said that the waiver was given by raising the maximum Loan to Value (LTV) ratio for conventional banks or Financing to Value (FTV) for Islamic bank financing to 100 percent.

In other words, banks can finance property purchases up to 100 percent, and customers are not subject to down payments. According to Perry, down payment waivers apply to all property types, ranging from landed houses, flats, and shophouses or office houses. "The easing is intended to boost property loan growth while still paying attention to the principles of prudence and risk management," he said. This regulation is in effect from March 1 to December 31, 2021.

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