Many home buyers in Indonesia only budget for the deposit, then get a shock close to signing when other bills appear, and they are not small. Upfront costs on a mortgage, known locally as Kredit Pemilikan Rumah (KPR), are easy to miss because developers do not print them in large type on the brochure. This article breaks them down and explains how to get the full list early.
Provision Fee
The provision fee (provisi) is what the bank charges for granting the credit facility. It is usually a percentage of the loan amount, not the house price. The bigger the loan, the bigger the fee.
The percentage varies between banks, and is sometimes reduced or waived during promotions. Ask what the percentage is, what figure it is calculated on, and when it is due.
Admin Fee
The admin fee covers processing your loan file. It is usually a flat amount rather than a percentage. It is smaller than the provision fee but still belongs in your budget.
Some banks combine provision and admin on one line. Ask them to split it so you can compare banks fairly.
Appraisal Fee
Before approving a mortgage, the bank has the property valued. An appraiser visits, checks the building and surroundings, and sets a value. The borrower pays for this, sometimes upfront before approval is certain.
Ask whether the appraisal fee is refunded if the application is rejected. Usually it is not. The valuation can also come in below the sale price, which means you need to put in a bigger deposit. That situation is covered in what to do when the appraisal comes in low.
Insurance Premiums
A mortgage usually requires two types of insurance:
- Life insurance, which pays off the remaining loan if the borrower dies.
- Fire insurance, which protects the building as the bank’s collateral.
Premiums may be paid in one lump sum for the whole term, or yearly. A lump sum feels large at signing. Ask which option applies and what risks are covered. More detail in our article on mortgage insurance.
Notary and PPAT Fees
A notary and a land deed official, called Pejabat Pembuat Akta Tanah (PPAT), handle several deeds during a mortgage purchase, including:
- The sale and purchase deed, Akta Jual Beli (AJB), between seller and buyer.
- Transferring the certificate into the buyer’s name.
- The mortgage lien deed, Akta Pemberian Hak Tanggungan (APHT), and its registration, which makes the home the bank’s collateral.
- Checking the certificate at the National Land Agency, Badan Pertanahan Nasional (BPN).
Banks usually work with partner notaries. Fees vary between notaries and regions, so ask for a written breakdown by item. Each role is explained in our article on notaries and PPATs.
Taxes and Other Costs Outside the Bank
These are not bank fees, but they often fall due around the same time as signing:
- Land and building acquisition duty, Bea Perolehan Hak atas Tanah dan Bangunan (BPHTB), paid by the buyer to the local government.
- The seller’s income tax (PPh), which is the seller’s obligation but is sometimes negotiated.
- Duty stamps, certificate checks and similar items.
How taxes are split between buyer and seller is best agreed in writing early in the negotiation.
How to Get the Full Cost List
A simple step people forget: get everything in writing before you pay a booking fee or sign anything.
- Ask the bank for an upfront cost simulation, not just an instalment simulation. Say you want to see provision, admin, appraisal, insurance and estimated notary fees.
- Ask the partner notary for a breakdown, itemised by deed and tax.
- Ask what the developer covers, if you are buying new. Some developers pay part of the costs as a promotion. Make sure it is written into the preliminary sale agreement, the Perjanjian Pengikatan Jual Beli (PPJB), or the order form.
- Compare two or three banks in the same format. A slightly lower rate can be cancelled out by a higher provision fee.
- Keep a reserve. There is always a small item that shows up late. A buffer beyond the simulation keeps you calm before signing.
A Simple Way to Track the Costs
To compare easily, make one simple table for each bank you ask. Three columns are enough: cost item, amount and when it is paid. Fill it in from written documents, not from conversations.
| Cost item | Amount | When it is paid |
|---|---|---|
| Provision | per the bank’s simulation | at signing |
| Admin | per the bank’s simulation | at signing |
| Appraisal | per the bank’s simulation | before approval |
| Life and fire insurance | per the policy | at signing or yearly |
| Notary and PPAT | per the notary’s breakdown | at signing |
| BPHTB | per the local government’s calculation | before the AJB is signed |
Once every row is filled, add them up and include your deposit. That is the cash you actually need until the keys are in your hand. Compare that total across banks, not just the interest rate.
Common Mistakes
- Paying a booking fee before knowing the total cost. If the money turns out to be short, the booking fee can be lost. Read up on booking fees, holding deposits and down payments before paying.
- Spending all your savings on signing. A new home almost always needs moving costs and furniture. A resale home often needs small repairs.
- Assuming a “no fees” promo means everything is free. Usually only some items are covered. Ask which ones.
Questions You Can Put to the Bank
- What is the total I need to pay up to the end of signing?
- Which costs are paid upfront, and which are deducted from the disbursement?
- Is insurance paid as a lump sum or yearly?
- Are there charges if I cancel after the appraisal?
- What is the penalty if I pay off part or all of the loan early?
The last one is not an upfront cost, but it is better to know before signing, because it matters if you ever want to switch banks. See refinancing your mortgage.
Wrapping Up
Upfront mortgage costs are made up of many small items that add up to a real sum. Get every figure in writing from the bank and the notary, compare several banks in the same format, and keep a reserve on top of your deposit.
If you are preparing to buy a home in Banjarmasin, Banjarbaru or elsewhere in South Kalimantan and want to make sure your budget is realistic, the Vorneo Property team can help.
