Turkish Mortgages

Listen to Spotblue Director Julian Walker discuss Mortgages in Turkey

To have your finance for your Turkish mortgage Approved in Principal, simply complete the no obligation Questionnaire below. Our Turkish mortgage expert broker will then source the best Turkish Mortgage deal for you and have it (where applicable) ‘approved in principal’ for your Turkish property or home.

Turkish Mortgages

If you decide you want to buy a property in Turkey and you are not a cash buyer, there are several ways of raising the finance. Most will do that in their country of origin; possibly if you have sufficient equity in your existing home you can choose to use that to take out a new mortgage, whilst some opt for taking out a Turkish mortgage. As always take advice as to the best way for you to raise the finance to fund your new home.

To a certain extent Turkey is generally a cash market however finance is available from a range of lenders, Turkish banks, European banks such as French and Dutch banks.

They typically lend in Sterling and Euro – Sterling rates are around 7% and Euro rates are around 4% – they tend to lend minimum loan amounts which are around £25,000 or £50,000 either Euro or Sterling and certain criteria applies and UK credit scoring is used. Loan to value (LTV) is typically 70% or 75% however if you do take out finance on a property in Turkey you need to take into consideration it is based on loan to value (LTV) not loan to purchase price as usually the valuation of a property will not equate to the purchase price, you need to take this in to consideration when making your calculations.

Therefore if you buy a property for £100,000 for example which is the property value, but the valuation by the property assessors (banks) is valued at £80,000 it means you get 70% of £80,000 not 70% of £100,000 for your mortgage. It goes without saying you need a deposit of around 30%.

Mortgage Facts

  • A maximum loan of either 8o% loan to value
  • Maximum term of loan amount is 15 years
  • Rates from around 7% GBP

Taking out a Turkish mortgage is very popular and figures are increasing, the market is developing and it is becoming competitive which is a good thing for the investor. Mortgages for foreigners only came in to play in 2007 so it is still relatively new to Turkey. The availability is generally good and foreigners are asked to give proof of wage slips etc as one would in the UK for example. With this in mind lenders still prefer to shorter lending terms therefore 10-15 years is considered the norm and around 7% is typical. Another bonus is the lender carries out legal checks on the property and arranges a valuation. Mortgages for foreigners are usually in Sterling or Euro and this is advisable for an overseas mortgage to avoid any exchange rate issues as we are all aware the market fluctuates.

If you want a Turkish mortgage it is in your own interest to use a reputable agent who will already have a good working relationship with lenders and can negotiate the best mortgage for you. You could encounter language difficulties and other problems so try not to do it yourself and ask a specialist to arrange it on your behalf it saves time and confusion.

If you need finance it is better to arrange it before you find a property so when you do find one you are good to go. Know in advance what you can afford it also proves that you are a serious buyer and stands you in good stead when negotiating a price. An ‘Approval in Principle’ will tell you how much you can borrow and what price range you can realistically consider when conducting your property search it is free so don’t worry about paying a cost for this service in advance.

The Market

According to figures released in 2016 from global estate agents Knight Frank said that Turkey had the fastest rising house prices in the world. Prices had indeed risen by 18.9% over the previous 12 months compared with the 2.7% global average. This was due to high levels of foreign investment, an ever growing population; the median age in Turkey is just 30.2 years old (a young work age population) and construction had begun to slow down somewhat, which as a result meant that property prices had begun to increase.

Overseas buyers are attracted by the affordability of property and due to the fact many are in beautiful destinations along the Aegean and Mediterranean coastlines.

According to the Turkish Statistical Institute (Turksat) official data the number of foreign buyers investing in Turkey in May 2018 rose by 36.1% year on year.

For more information contact us today!