Inflation Control and Financial Facilities Strategy
Adjustment of LTV Ratio for Property Loans, FTV Ratio for Property
Financing, and Down Payments on Automotive Loans/Financing*
Bank Indonesia adjusts macroprudential policy in the property and automotive sectors by: (i) relaxing the LTV ratio for property loans
and the FTV ratio for property financing; (ii) providing additional incentive on LTV ratio for green property loans and FTV ratio for green
property financing; (iii) relaxing down payments on automotive loans/financing; (iv) providing additional incentive on down payments on
green automotive loans.
•
Policy Backgrounds
In response to global and domestic economic
developments, Bl is maintaining an accommodative
policy mix to maintain the economic growth while
also maintaining macroeconomic and financial
system stability. This effort will be targeted to
several potential sectors.
Considering the ongoing needs to stimulate the
property and automotive sectors which have a huge
backward and forward linkages to other sectors in
the economy, BI decides to relax LTV/FTV policy for
property loans/financing and down payments on
automotive loans in compliance with prudential
principles.
Additional incentives are also given to support
sustainable development through green financing in
order to reduce potential disruptions to financial
system stability stemming from environmental
degradation.
As a prudential mitigation, those relaxations will be
given to borrower with strong repayment capacity
and low credit/financing risk.
Main Regulatory Points
1. Adjustment of LTV Ratio for Property Loans and FTV Ratio for Property
Financing.
a. Bl decides to relax the LTV ratio for property loans and FTV ratio for
property financing by 5% from current ratio as follows:
Landed House
Type >70
Type >21-70
Type $21
Table 1. Current LTV/FTV Ratio
Meets NPL/NPF Criteria
Property Loan & Property
Financing based on Akad
Murabahah & Akad
1
Istishna
Does Not Meet NPL/NPF Criteria
Property Financing
based on Akad
Murabahah & Akad
Property Financing
based on akad MMQa
& akad IMBT
22
Property Financing
based on akad MMQ
& akad IMBT
1
22
1
Istichna
2
23
1
80%
85%
Apartment
Type >70
80%
Type >21-70
85%
Type ≤21
8.5%
Office House
85%
Landed House
Type >70
Type >21-70
Type ≤21
2
23
85%
80%
70%
90%
80%
60%
70%
85%
75%
65%
- 80%
70%
85%
80%
70%
60%
85% 75%
65%
85%
90%
80%
70%
90%
80%
70%
85%
80%
70%
80%
70%
85%
80%
70%
80%
70%
Table 2. Adjusted LTV/FTV Ratio
Meets NPL/NPF Criteria
Property Loan & Property Property Financing
Does Not Meet NPL/NPF Criteria
Property Financing
Property Financing
Financing based on Akad
Murabahah & Akad
based on akad
MMQ & akad IMBT
based on Akad
Murabahah & Akad
based on akad MMQ
& akad IMBT
Istishna
22
1
22
1
Istishna
2.
23
1
2
23
1
85%
90%
90%
85%
95%
75%
85%
65%
90%
80%
75%
85%
70%
75%
Apartment
•
Bl will regularly evaluate this policy at least once a
year.
Type >70
85%
90%
85%
75%
65%
90%
80%
70%
Type >21-70
90%
90%
95%
85%
75%
95%
85%
75%
Type $21
9.0%
90%
85%
75%
85%
75%
Office House
9.0%
90%
85%
75%
85%
75%
Source: Bank Indonesia *This adjustment will be effective from December 2nd, 2019
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