Zero-Down-Payment Mortgages Extended: What Are the Upfront Costs?

Bank Indonesia has extended relaxed property financing rules through December 31, 2027. Its October 21, 2026 decision preserves LTV/FTV ratios of up to 100% for qualifying banks, allowing zero-down-payment mortgages to remain possible. Source: Bank Indonesia.

Prospective buyers still need cash before signing. Credit approval, transaction expenses, and the cost of moving into a property depend on the bank’s assessment and the purchase terms. The down payment answers only one part of the funding question.

Financing the full purchase also means taking on more debt. Buyers can retain their savings, but they pay installments and interest on a larger principal. The benefit needs to be assessed against repayment capacity after any promotional interest period ends.

Extension of relaxed property LTV/FTV rules for qualifying banks. Source: Bank Indonesia, October 21, 2026 policy decision. The provision does not guarantee credit approval.

Zero Down Payment Still Requires Credit Assessment

Loan to value, or LTV, compares a loan with the property value used as its reference. Financing to value, or FTV, applies to financing arrangements. A higher financing ratio allows buyers to use less of their own money toward the property’s purchase price.

Banks still assess income, existing obligations, property documentation, and lending risk. OJK explains that financing decisions follow financial institutions’ risk management and business considerations. Credit information in SLIK is one assessment input rather than the sole determinant of eligibility. OJK’s explanation of housing finance.

Differences in property valuation also matter. For illustration, a house is offered at Rp500 million, but the bank approves only Rp450 million following its valuation and credit assessment. The buyer still needs to cover the Rp50 million gap unless the transaction changes or another facility is approved.

This example does not establish an appraisal formula for all banks. It shows how the seller’s asking price and the bank’s approved loan can differ. The buyer’s required contribution becomes clear only after the final loan amount and expenses are documented.

Four Groups of Costs to Prepare For

Mortgage-related expenses are paid to several parties. Separating them helps buyers review charges without assuming a zero-down-payment promotion covers every expense.

A. Loan Application and Disbursement Costs

Origination, administration, and appraisal fees should be checked in the product information summary or credit offer. Their calculation methods differ: some follow the loan amount, some are fixed charges, and others depend on valuation work.

BCA’s home-purchase mortgage page, for example, lists a 1% origination fee, a Rp500,000 administration fee for loans up to Rp500 million, and appraisal fees of Rp1.1 million to Rp1.5 million. These are one product’s published charges when checked, not industry-wide rates.

B. Collateral Documentation and Insurance

Notary services, collateral registration, and insurance should be checked separately from application charges. The CIMB Niaga KPR Xtra Manfaat product summary illustrates how financing costs and risks are disclosed in product documents rather than solely through an advertised interest rate.

Buyers should request an explanation of who pays each charge, when payment is due, and whether it is included in a developer’s package. Written confirmation helps prevent an expense from being counted twice or overlooked.

C. Taxes and Property Transfer Expenses

BPHTB, Indonesia’s duty on acquiring land and building rights, is one obligation buyers need to check. The Directorate General of Taxes explains that BPHTB falls under local government authority, while income tax on the transfer is generally the seller’s obligation. DJP’s explanation of land transaction taxes.

The final amount should not be estimated solely by applying a percentage to the asking price. Buyers need to check the assessment base, applicable allowances or exemptions, property status, and local rules. VAT and related incentives also require transaction-specific confirmation rather than an assumption that they are included in the advertised price.

D. Cash Needed to Occupy the Property

Expenses after signing can include moving, utility connections, repairs, and essential furnishings. These are not necessarily bank charges, but they still require the buyer’s cash.

A property needing immediate renovation creates a different funding requirement from a move-in-ready unit. The budget should follow the condition of the actual property inspected rather than a standard assumption applied to every home.

A Rp500 Million Home Still Has Upfront Expenses

Consider a Rp500 million property financed with a Rp500 million loan. Applying the three BCA charges above produces the following illustration:

• Origination fee: 1% × Rp500 million = Rp5 million.

• Administration fee: Rp500,000.

• Appraisal fee: Rp1.1 million to Rp1.5 million.

The subtotal is Rp6.6 million to Rp7 million. It excludes notary services, collateral registration, insurance, taxes, any financing gap, and the cost of occupying the home.

Using these fees helps illustrate the size of individual charges. The calculation does not mean BCA will approve 100% financing for the property, does not account for individual promotions, and is not an estimate of the full purchase cost. Final amounts depend on the credit offer and transaction documents.

Buyers should ask which charges are payable before approval, at signing, or after disbursement. Refund arrangements if the application or purchase is canceled should also be checked before payment.

A Larger Loan Means Larger Installments

The effect of zero down payment can be calculated by comparing two ways to buy a Rp500 million home. Assume a 20-year term, an 8% annual nominal rate divided by 12 for monthly calculations, and annuity repayments. The rate is assumed to remain unchanged throughout the term and is not a bank quotation.

The installment formula is:

Payment = P × r ÷ [1 − (1 + r) to the power of −n]

P is the loan principal, r is the monthly interest rate, and n is the number of months.

A Rp500 million loan produces a monthly installment of approximately Rp4,182,200. If the buyer pays a 20% down payment, or Rp100 million, the Rp400 million loan produces an installment of approximately Rp3,345,760.

The difference is about Rp836,440 per month. Choosing zero down payment retains Rp100 million initially but creates a larger monthly obligation. Not all the retained money is necessarily available for other purposes because transaction expenses and housing needs still require payment.

Interest After the Promotion Can Change Affordability

The initial rate needs to be read alongside the subsequent rate schedule. BCA’s RumahSaya mortgage interest information describes fixed, stepped, and floating arrangements. Each product’s structure determines when installments may change.

As a separate sensitivity test, a Rp500 million loan over 20 years produces a monthly installment of approximately Rp4,825,108 if the nominal annual rate is assumed to be 10% from the start. That is approximately Rp642,908 more than the 8% scenario.

This comparison does not calculate the payment change after several years. Actual repricing calculations must use the remaining principal and remaining term when the rate changes. The illustration shows how an initially comfortable income buffer can narrow when borrowing costs rise.

The Documents That Determine Purchase Readiness

Before paying a booking fee or signing the mortgage agreement, a prospective buyer should obtain:

• The final approved loan and required personal contribution.

• Itemized charges, payment recipients, and payment dates.

• The interest schedule and installment simulations beyond the initial period.

• Cancellation, early repayment, and late-payment terms.

• Legal documents and an assessment of the property’s condition.

The extension of zero-down-payment financing offers a way to reduce the initial contribution toward a home’s price. Whether the purchase is affordable becomes clear only after upfront expenses and long-term obligations are calculated together. A useful offer sets out those cash flows in writing, including what happens when promotions expire.

Disclaimer: This article provides general information and is not credit, tax, or property purchase advice. Approval, charges, interest rates, and incentives depend on financial institution terms and applicable rules. The simulations use assumptions and do not replace a formal credit offer.