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Can a foreigner get a mortgage in Turkey?

Mortgage

If you need finance to buy a property in Turkey, there are a few options for foreign buyers. While it's possible to obtain a mortgage through a Turkish bank, with interest rates high we recommend avoiding borrowing in Turkey and opting for finance through a developer or in your home country.


1. Get finance through your developer

Large developers offer favourable finance terms over periods of up to five years. Buyers are generally required to pay a 30 to 35% downpayment. These are offered at much lower interest rates than Turkish banks.


2. Arrange finance in your home country 

Interest rates at home are likely to be much lower than in Turkey. Arrange finance through your bank, or release equity from an existing property.


3. Arrange a mortgage from a Turkish bank

Foreigners can obtain finance through a number of Turkish banks, most of which have English speaking advisors to guide them through.

Most banks offer up to 70% of the property value, and some will also offer loans in Dollars, Euros or Pounds, for buyers wishing to avoid the exchange rates. Repayments are made over a term of no more than 20 years, and must not be more than a third of your income.

Some banks also offer off-plan mortgages for buyers whose homes are still under construction, but this is contingent on a guarantee from the construction company.


What are the interest rates on a Turkish mortgage?

Turkey's high interest rates are the principal reason foreign buyers are deterred from taking out a loan from a Turkish bank.

If you're an investor aiming to earn rental income from your property, the high cost of borrowing will quickly eat into any income you make. We recommend adjusting your budget accordingly, allowing you to invest as much as you can without the need for finance.


Conditions of a mortgage in Turkey

If you do decide to opt for a mortgage in Turkey, be aware that a bank will not approve a mortgage if your property lacks an iskan (habitation licence), or already has debt against it. An iskan shows the property meets the government regulations which makes it fit for habitation. A number of older resale properties lack an iskan, which is one of the reasons why foreign buyers tend to favour new build properties.

When you apply, your bank will check with the local land registrar to check these details.


How do you get a mortgage in Turkey?

You will need the following documents, which should be translated into Turkish and certified:

- Signed application form

- Notarised passport copies

- Bank statements no older than three months proving income

- If employed, your payslips. If self-employed, records showing two years of financial history

- Overview of private assets and debts

- Turkish tax number

- Credit rating certificate from your home country

- Title deeds copy of the property you are buying


For more advice and information on Turkish mortgages for foreigners or investing in Turkish real estate, please get in touch.

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