BI: Mortgage Rates Will Decline in 2017

JAKARTA-Bank Indonesia (BI) believes the transmission of monetary policy easing interest rates to banks will be increasingly felt in 2017, and push down consumer lending, including mortgages (KPR).

Director of the Department of macroprudential policy Dwityapoetra S Large BI say, throughout 2016 BI monetary policy easing is already loosening of bank interest rates, though not significantly. Currently, for mortgages, he said, the average interest charged by banks amounted to 10.3 percent.

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“Now, if the mortgage is already 10.3 percent, total credit is 11 percent. Transmission is already plasticity in there,” said Dwitya.

However, Dwitya said the decline in mortgage rates will also greatly depending on the capabilities of each banks to reduce the cost of funds (cost of funds).

For example, for a mortgage taken customer before 2016, the decline in mortgage interest can not necessarily, because it could have taken bank financing when it is long-term.

Likewise, if funding for the mortgage portfolio of bonds, as banks remain as the publisher must pay interest on the bonds being converted into a component in the formula for calculating mortgage interest.

“It all depends again to the condition of assets and liabilities (liabilities) of banks. For example, Savings Bank Negara (BTN), can not go down first may be due to financing many disposable bonds, but next year could go down because it has matured , “he said.

At this time, mortgage rates in the BTN is a mortgage subsidy of 5 per cent, while non-subsidized 9.9 percent.

The stimulus from monetary policy to the decline in bank lending rates is the interest rate cuts monetary already cut by 150 basis points to 4.75 per cent (BI 7-Day Reverse Repo Rate).

To help bank liquidity, the monetary authorities also reduce the ratio Statutory-Primer 150 basis points since December 2015 to 6.5 per cent.

Despite the impact of the decline in bank interest rates will be felt next year, Dwitya acknowledges there are still many obstacles to banking in order to continue to reduce lending rates. One of the barriers of the potential rise in inflation, due to be raising their electricity rates 900 VA.

“Yes, we have to see and depending on macroeconomic conditions as well,” he said.

property.okezone.com

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