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Mortgages in Turkey

Turkey is rapidly becoming the place to buy a holiday home in Europe. With phenomenal value for money, new regulations, a strengthening economy, increasing tourism and FDI (Foreign Direct Investment), incredible mortgage possibilities exist in Turkey.

The economy

The economy in Turkey is in a rapid state of recovery, following a downturn in 2001. The value of the new Turkish Lira is continuing to expand. Turkey is the 19 th largest economy in the world by GDP, and is forecast to become the 17 th largest by next year. Economic growth is forecast to soar. Foreign investment into Turkey hit a record $10 billion last year.

The attraction

Why should you buy a house in Turkey? Turkey is becoming an increasingly popular and fashionable holiday destination. During 2005, the country earned more than $18 billion in revenue from tourism. Turkey expects 26 million tourists this year, mostly from Western Europe and Russia. Beside stunning scenery, a fantastic climate, a beautiful coastline and enchanting villages, Turkey also has over 1000 thermal springs. The Turkish summer extends for much longer than most EU destinations.

Buying property in Turkey

Changes in restrictions on foreign people buying houses in Turkey have created the beginnings of a property boom, with Britons leading the investment in property. The new legislation states that foreigners can own a maximum of 2.5 hectares, although this can be extended to a maximum of 20 hectares following an application to the Council of Ministers.

All the evidence indicates that a property boom is unfolding in Turkey, and that substantial capital gains are to be had. There is no capital gains tax as of yet. Turkey's young and ambitious population ensures that there is a strong domestic demand for properties - holiday home buyers are not limited to foreign investment when re-selling property. Whilst the Turkish mortgage system previously acted as a barrier to investment, with Turkish banks only able to offer short-term loans, new mortgage facilities have been created. These will allow the Turkish property market to increase substantially, and allow domestic buyers to gain a foothold. The next few years, and perhaps beyond, are likely to see a dramatic increase in the construction of property, with many new holiday homes and buy-to-let opportunities being created.

Buying commercial property in Turkey

The dynamic new Turkish property market has created a flood of international investors, many of whom are buying businesses and commercial property. Kursat Tuncel, the general manager of the Turkish Real Estate Investment Trust said this year: "Investors have always been interested in the Turkish market, but recently this interest has skyrocketed." Margins for profit are said to be far higher for Turkish commercial property, than within developed domestic commercial property markets.

Getting a mortgage in Turkey

UK (or non-UK) applicants for mortgages to buy Turkish residential property are able to borrow 80 per cent of the valuation or the purchase price (whichever is the lower.) This figure currently applies to Istanbul and the Turkish Riviera only, and is for purchases and re-mortgages for home improvement in Euros and Sterling only. At this stage, mortgages for the rest of Turkey, and for other purposes, are being dealt with as they arise and on a case-by-case basis.

The minimum loan for property is 40,000 Euros, with a maximum loan of 200,000 Euros. Currently, the maximum loan term is for 20 years, and is available for people up to the age of 75. Loans are only available on a Fixed Rate basis over periods of 1,3 or 5 years, and each loan is reviewed at the end of this fixed-rate period.

How should I apply for a mortgage in Turkey?

Please use our Mortgage Enquiry Form and one of our experts will contact you for further assistance. Alternatively, you can give us a call on 0845 108 0505.