What is the Definitions of Mortgages? Can foreigners obtain mortgages in Turkey?
- Are you a foreigner looking to buy a property in Turkey and don’t know where to start? You’re in the right place. You’ll find valuable information on this page, and we’ll do our best to answer your questions.
- What is a mortgage? A mortgage is a loan you can get from a bank. Banks are often referred to as ‘mortgage lenders’ that can help you buy a house. To get money, you need a property that can guarantee a loan. And you have to pay back your debt on time.
- What is the difference between a mortgage and housing credit? There is just one difference between them: interest rates. While a housing credit has a constant interest rate, a mortgage has tax advantages because it guarantees the property.
- Who is the mortgagor, and who is the creditor? As the debtor and owner of the property, the mortgagor is the debtor, while the creditor is the bank, the mortgage lender, and the mortgagee.
Can foreigners obtain mortgages in Turkey?
- This part aims to determine whether a foreigner can obtain a loan in Turkey. Let us continue.
- Absolutely! Foreigners can obtain a mortgage in Turkey to purchase a property.
- The easiest way is to visit the Turkish banks to obtain a mortgage.
- Interest rates on mortgages vary, depending on the bank. Variable interest rates and fixed interest rates are the two main types of interest rates. Both Turks and foreigners use fixed interest rates. The most common type of mortgage is a fixed-rate mortgage, so the rates never change.
- Repaying a debt: In Turkey, you have to pay back your debt after about 15 years maximum; however, make sure you pay it within ten years.
Turkish mortgage procedures
- We will discuss how to get a mortgage and how purchasing a property works in this section.
- It’s a rule that you can’t be older than 70 to get a mortgage.
- You can make good money with an apartment or house here because the real estate market is one of the cheapest and most prominent in the world to make more money than elsewhere.
- There are indeed mortgages available for foreigners who are not citizens because they can prove their financial stability through a bank statement, employment certificate, etc. You have to check the region, the bank, the currency, and the type of property you want to buy.
How can I get a mortgage?
- Keeping your credit history clean means paying your rent, loans, and credit card bills on time.
- Mortgages are available in TRY and other currencies, like USD, EUR, GBP, etc.
- Turkey lets you borrow a mortgage for up to 20 years, up to a minimum of 3 years. You can get a mortgage loan in many cities.
Mortgage amounts and payments in Turkey
- As we review this section here, we will discuss how much money you can borrow and how you can repay your debt, and prepare your application.
- How much money can you borrow? Foreigners can get up to 70% LTV (loan-to-value). So if you want to buy an apartment worth 100,000 TRY, the bank will lend you up to 70,000 TRY. In general, some banks limit the maximum loan-to-value to about 65%.
- What method do you use to repay your mortgage in Turkey? Once you have received a loan, you must repay it. Pay your debt in monthly installments from your Turkish bank account. If you live in another country, you can use a bank there instead.
- If you don’t pay your mortgage debt on time, you’ll get a 1% – 2% penalty.
Here’s some advice:
- Mortgage contracts should be in the customer’s mother tongue or translated into it.
- You have to get your spouse’s consent if you’re married.
- Get the mortgage at least a month or two before to speed things up. Online banking is generally more efficient.
- When you provide the necessary documentation, the bank runs a credit check. The bank will then conduct the valuation and survey of the property, which could take a few more days after approval.
- You’ll get the mortgage offer, which stays valid for four months if everything goes well.
- The bank will check the title deed, too.
- Depending on everything going well, you’ll need to sign the Deed of Sale (tapu) and mortgage at the Tapu Office.
You’ll need these documents but are not limited to:
- Passport of borrower
- Passport copy of property owner/seller
- Property title deed
- Documentation by real estate companies
- Turkish tax ID
- Last three months’ salary statement, payroll, or income
- Bank receipts
- Valuation report of property
- Verify your address in your country of residence, proof of ownership of property, information about other incomes, and documents for any cars you might own.
Which bank is best for mortgage loans in Turkey?
- You can certainly take out loans as a foreigner if you have a residence permit or work permit in Turkey. You’ll find different arrangements, payment plans, criteria, interest rates, fees, and rules at each bank. It’s about the bank, where you can get a loan/mortgage, etc.
- Several banks in Turkey lend mortgages to foreigners, including Ziraat Bankasi, Garanti Bankasi, Türkiye Is Bankasi, Kuveyt Türk Bank, Deniz Bank, ING Bank, and Yapi Kredi Bank.
- Turkey Finance Bank offers a 12-year payment plan with fair profit and allocation fees. Financing is available for up to 75% of the appraisal value of a house. Real estate valuations are performed by independent companies licensed by the Capital Markets Board (CMB).
- The Garanti BBVA Bank offers fixed and variable interest rate mortgage options, like TRY, USD, EUR, and GBP, and has a maximum term of 240 months. Loans can be up to 500,000 TRY or the equivalent in foreign currency. EU nationals can borrow up to 65%, while non-EU citizens can borrow up to 50% LTV.
- HSBC Bank offers extended repayment terms for up to 10 years in TRY. The minimum mortgage amount is 5,000 TRY, and the maximum is 65% LTV. There’s a 35% down payment requirement at HSBC.
- We offer moderate mortgage rates for up to 15 years at 60% LTV at Deniz Bank. You can also get installment checks in USD, EUR, RUB, and GBP.