BI's Reference Interest Rate Rises Again: Here's a List of Mortgage Interest Rates from Several Large Banks in Indonesia

Bank Indonesia (BI) raised its benchmark interest rate, the 7-Day Reverse Repo Rate (BI7DRR), by 50 basis points (bps) to 4.75% on October 20, 2022.

Cumulatively, BI has increased its benchmark interest rate by 125 bps in the last three months. This increase widens the net interest rate differential between the Indonesian Rupiah and the US dollar to 150 bps, from a previous difference of 100 bps.

Citing Katadata.co.id, Irman Faiz, an economist at Bank Danamon, stated that BI's interest rate hike will increase borrowing costs for both businesses and households. The increase in BI's benchmark rate will be felt as it will impact consumer credit interest rates, including People's Housing Credit (KPR). Bank Indonesia estimates that the transmission to higher loan interest rates takes about six months under normal conditions.

Based on data on the base lending rates of several large banks published by the Financial Services Authority (OJK) as of August 2022, current bank KPR interest rates are set in the range of 7-10%. The KPR interest rates for Bank Mandiri, BRI, BNI, BTN, and CIMB Niaga are set at 7.25%.

Meanwhile, BCA's KPR rate is set at 7.20%, Bank Panin at 7.75%, Bank Danamon at 8%, Bank Permata at 8.25%, and Bank OCBC NISP at 8%.

Note that the base lending rate is used as the basis for determining the credit interest rate that banks will charge customers. The base lending rate does not yet include premiums or risks associated with lending to customers.