Financing options for property in Turkey
Turkey's real estate market has modernized significantly, yet it remains relatively affordable compared to more developed countries. This affordability attracts many expats and foreign investors, who often have different financing options to consider when purchasing property in Turkey. Here, we explore the various methods to finance a real estate purchase in Turkey and offer insights into the best approach for different buyers.
- Financing in Your Home Country
For many foreign buyers, securing financing in their home country can be more advantageous than obtaining a mortgage in Turkey. This is especially true for those who can release equity from their existing properties or secure another mortgage at lower interest rates available in their home countries. Given Turkey's relatively high interest rates, this approach can result in significant savings.
- Mortgage from a Turkish Bank
Foreign buyers can also obtain mortgages from Turkish banks, which usually offer up to 70% of the property's value. These loans can be in various currencies, including Dollars, Euros, and Pounds, with repayment terms of up to 20 years. However, buyers should be aware of the high interest rates, which can significantly impact the overall cost of the mortgage. Additionally, Turkish banks require extensive documentation, including proof of income, financial history, and a Turkish tax number.
- Financing through Property Developers
In cities like Istanbul, many property developers offer financing options with favorable terms, such as 0% interest rates for up to five years. Buyers typically need to provide a down payment of 30-35%, with the balance paid in monthly installments. These deals are often available for off-plan or new-build properties, which can be appealing for investors looking to capitalize on discounted prices.
Important Considerations
- Iskan (Habitation Licence): Ensure the property has this essential document, confirming it meets government regulations.
- Interest Rates: Consider the impact of high Turkish interest rates on your investment, especially if you plan to earn rental income.
- Documentation: Prepare necessary documents, such as passport copies, bank statements, and proof of income.
Articles of Interest
- Best Places in Turkey to Buy a Holiday Home: Explore the most popular destinations for holiday homes along the Aegean and Mediterranean coasts.
- Is It Safe to Buy Off-Plan Property? Learn about the benefits and risks of purchasing a property that hasn't yet been built.
