Mortgage Loan Contract Template for Indonesia

The Mortgage Loan Contract is a fundamental document in Indonesian property financing, used when a lender provides funding for property acquisition or refinancing, secured by a mortgage right (Hak Tanggungan) over real property. This document is essential for both residential and commercial property transactions in Indonesia, combining elements of both loan financing and security creation. It must comply with various Indonesian regulations, including Law No. 4 of 1996 on Mortgages, Banking Law No. 10 of 1998, and relevant Financial Services Authority (OJK) regulations. The agreement typically includes comprehensive provisions covering loan terms, security arrangements, borrower obligations, and enforcement mechanisms, making it suitable for use by banks, financial institutions, and other authorized lenders operating in the Indonesian market.

1. Parties: Identification of the lender (bank/financial institution) and borrower(s), including complete legal names, addresses, and registration details

2. Background: Context of the loan agreement, purpose of the loan, and brief description of the mortgaged property

3. Definitions: Definitions of key terms used throughout the agreement

4. Loan Details: Principal amount, interest rate, term, and payment schedule

5. Property Details: Legal description of the mortgaged property and confirmation of ownership

6. Mortgage Terms: Creation of mortgage rights (Hak Tanggungan), registration requirements, and security provisions

7. Representations and Warranties: Statements of fact by the borrower regarding their capacity, property ownership, and other material matters

8. Borrower's Covenants: Ongoing obligations of the borrower including property maintenance, insurance, and payment obligations

9. Events of Default: Circumstances constituting default and consequences thereof

10. Enforcement Rights: Lender's rights and remedies in case of default, including property sale procedures

11. Costs and Expenses: Allocation of fees, taxes, and other expenses

12. Notices: Communication procedures between parties

13. Governing Law and Jurisdiction: Confirmation of Indonesian law application and jurisdiction for disputes

14. Execution: Signature blocks and notarization requirements