Recent reports say foreign buyers of Turkish property are on the up, with more than 22,000 purchases made in 2017. This is no surprise because Turkey offers some of the best prices in the Aegean and Mediterranean, to accompany the idyllic dream of a life in the sun.
While most foreigners buy with cash, a few owners have gone down the route of obtaining specialised Turkish mortgages for foreigners. Offering finance to non-resident and non-Turkish nationals shows Turkey’s personal stake in attracting foreigners to its real estate market.
Official 2017 reports from Turk Stat (Turkish Statistical Institution) show foreign buyers account for 5% of the market, but with year-on-year increases, this figure could rise even higher. Low prices supplemented by an enormous range of new build homes for sale, make Turkey the ideal buyer’s market, so the only decision is whether cash or a mortgage is the right choice for your long-term real estate investment.
Potential foreign buyers have a large choice of Turkish banks with English speaking advisors to choose from. Most offer between 50 to 70% of the appraisal value of the property and some banks also offer loans in euros, pounds and dollars, for buyers who want to avoid the currency exchange rate.
Repayment terms can be structured over a period of up to 20 years depending on the bank. Interest rates vary, but repayments cannot be more than one-third of your income. Individual banks also offer off-plan mortgages for buyers upon a full guarantee from the construction company.
Two Important Things to Remember
Banks will not approve mortgages for properties without an Iskan or homes with existing mortgages or debts on them. At the time of application, they check with the local land registrar to ensure the property is free from debt.
An Iskan is a habitation certificate proving the home adheres to specified government building standards and is fit for human habitation. Many old resale properties do not have Iskan, and this drives the foreign mortgage market towards off plan and newly constructed homes.
Applicants will need….
Note: Foreign documents need to be translated and certified in Turkey.
There are always pros and cons to using a mortgage broker but going directly to a bank will possibly save on fees on a Turkish mortgage.
Their primary responsibility is to source the best deal for your current circumstances, but they also act as an advisory, which is helpful because the mortgage system for foreigners in Turkey works differently to that of other countries.
For more advice and information on Turkish mortgages for foreigners or investing in the Turkish real estate market, complete this form on Spot Blue Property Ltd.