A Guide to Turkish Mortgages

When you are considering buying a property in Turkey, you may need to finance some of the purchase with a loan. This is our introductory guide to Turkish mortgages.

How much can I borrow?

In Turkey, the typical loan-to-value (maximum amount you can borrow against a property) is around 70% to 75% for non-residents/foreign buyers. Buyers with a strong financial profile will be at the upper end of this range – i.e. will need a 25% deposit. This loan-to-value could be as low as 50%-60% depending on (a) where the applicant lives and (b) where the property is situated in Turkey.

There is usually a minimum amount you would be able to borrow – which will vary by lender but is approximately $75,000 USD (around €63k EUR at time of writing). So factoring in the approximate LTV, the minimum property price you should be looking at to borrow against would be $100,000 USD (€85,000 EUR).

What are the interest rates on Turkish mortgages?

Although Turkey offers very good value for money when it comes to property prices, compared to the UK and the Eurozone, interest rates in Turkey are much higher. They also tend to fluctuate more. The exact rate will of course depend on your personal circumstances; the good news is that there is a wide choice of mortgages available, even to non-residents. For the purposes of budgeting, interest rates in Turkey vary between 5.5% to 7%.

How much do I need to earn?

Like the majority of banks and lenders in Europe, there are strict affordability criteria – particularly for international investors and foreign buyers. They apply an income-to-debt ratio. Broadly speaking (although there will be slight variations between lenders) the total of all interest payments you have to make on your debts – including any mortgages or personal loans in the UK – cannot be more than 35% of your net income.

How long do mortgages in Turkey last for?

Compared to the UK, for example, Turkish mortgage terms are a little shorter. A typical Turkish mortgage duration will be 15-20 years, but very rarely longer than 20. If you’re used to 25-30 year mortgages, you’ll have to factor in that your monthly repayment will be a little higher because the duration is shorter.

Can I get a Turkish mortgage over the age of 60?

As mentioned, mortgages in Turkey will typically last for 20 years, or until the 75th birthday of the oldest borrower. If you are applying for a mortgage in your 50s or 60s and will be retiring, proof of projected retirement income will also be a strict requirement. The bank will want to be reassured that you have the necessary liquidity to pay back the finance.

Obtaining a mortgage in Turkey is trickier than other countries – there is no way of getting around that. We work with a number of independent overseas mortgage specialists who will be able to advise you on eligibility. If you’d like to get in touch to explore the possibilities of a Turkish mortgage, please do not hesitate to get in touch – [email protected]