Mortgages in Turkey
Update: Mortgages in Turkey are currently not available to foreigners
On January 24, 2022, the Turkish Central Bank issued a circular with new rules for foreigners buying property in Turkey. Now, in order to buy real estate, foreign individuals must first exchange their currency for the Turkish liras at the Central Bank through any bank in Turkey and then submit a certificate of foreign exchange transaction to the cadastral office. The amount on the certificate must match the value of the property on the title deed.
The new rules conflict with mortgage lending for foreigners, because the borrower usually pays only the down payment. Turkish banks are waiting for clarifications from the authorities and amendments to the legislation in order to resume issuing loans to foreigners. A convenient alternative to a mortgage for foreigners is an instalment plan from developers with a down payment of 25–50% and a repayment period of up to 3 years.
The mortgage market in Turkey is booming right now. According to Turkish official statistics, over 20% of residential properties were purchased with mortgage loans in February 2022. That is almost 20,000 properties sold, marking a 35% year-on-year increment. Turkish banks are willingly offering loans to foreigners, while mortgage terms for Turkish and foreign citizens differ insignificantly. Read more about banks, mortgage rates and terms, and instalment payment plans from developers being an advantageous non-mortgage option, in our article.
Turkish banks popular with foreigners
Some banks offer plenty of products to foreigners and publish information about their services in English; some also accept applications and give advice in Russian. Most popular banks with foreigners:
Mortgage terms in Turkey
Banks provide different mortgage terms and make customised offers to various lenders and properties. Mortgage products in some banks are fundamentally different, coming with fixed or variable interest rates and fixed or instalment payment plans (Garanti BBVA). However, some terms are the same.
Loan currency | Turkish lira, US dollar, euro, Russian rouble (only in some banks) |
|---|---|
Loan to value | 1) up to 50% (YapiKredi, Garanti BBVA) 2) up to 75% (Turkiye Finans) |
Loan term | generally for up to 10 years; up to 20 years with Garanti BBVA. |
Borrower’s age | from 18 to 70 years (at the end of the mortgage term) |
Maximum loan amount | typically up to 500,000 TL or the equivalent amount in a foreign currency. Some banks increase the maximum loan amount. |
Monthly payment | Maximum 40% proven income |
Note that the lending bank is your transaction partner making a decision to grant a mortgage loan evaluating the risks associated with the transaction and the borrower. A mortgage loan is an investment for a bank.
Turkish mortgages for foreigners
Lending banks are interested in issuing mortgages to foreigners and the lending process is the same for Turkish and foreign citizens. While it is difficult to verify most of the foreign applicant’s data, the lending bank still gets protection because the purchased property will serve as collateral for a loan, hence why foreigners usually do not experience any difficulty in approving mortgage applications.
From $199,000
Completion in: 2025.IV Total of 148 apartments
From $256,000
Completion in: 2024.IV Total of 781 apartments
From $406,000
Built in 2023 Total of 1441 apartments
From $243,000
Completion in: 2026.II Total of 686 apartments
From $636,000
Built in 2024 Total of 1050 apartments
From $181,000
Completion in: 2025.II Total of 689 apartments
From $302,000
Completion in: 2024.II Total of 167 apartments
From $342,000
Built in 2023 Total of 2750 apartments
Mortgage rates in Turkey
The Turkish lira has been unstable in recent years, hence the mortgage rates in Turkey are rather high in 2022 — up to 2.5% per month (34.9% per annum). Some Turkish banks provide special mortgage offers at the reduced rates — up to 1.2% per month (15.85% per annum). The rates fluctuate together with the national currency. Use the mortgage calculator Hesapkurdu to see and compare up-to-date offers of most Turkish banks.
Bank mortgage rates also depend on such individual factors as the loan amount and term, the borrower’s income, and down payment.
See below a sample mortgage calculation from Turkiye Finans that we requested (as of April 2022):
Loan amount | 2,000,000 TL (136,147 $) |
|---|---|
Loan term | 120 months (10 years) |
Monthly payment | 39,023 TL (2,656 $) |
Mortgage rate | 1.69% per month |
Bank’s mortgage commission | 10,000 TL (680 $) |
Pledge fee | 188 TL |
Appraisal fee | 870 TL |
Total cost of mortgage | 4,682,778 TL (318,667 $) |
Rates of foreign currency-denominated mortgages for non-citizens
Some banks, such as YapiKredi, issue mortgages denominated in the currency of foreigners’ residence or income repatriation country, e.g. euro, GB pound, US dollar, Swiss franc. Foreign currency-denominated mortgages were popular with non-citizens in Turkey for several years, yet the soaring inflation has been hitting the Turkish national currency hard in recent years tumbling the demand for foreign currency-denominated loans. Most banks do not offer such a mortgage product or discuss the rates case by case.
Documents for mortgage application in Turkey
The following documents are to be submitted together with your mortgage application:
- Certificate of ownership (TAPU) for the selected property.
- Copy of passport or ID (specifying the applicant’s residence address abroad).
- Official tax return for the previous year in the residence country.
- Personal income tax certificate for the last quarter signed by the employer or pension payslip (for retirees).
- Bank statement for the previous six months.
- Proof of existing assets. Any movable or immovable property owned by the borrower and located in the home country may be eligible collateral to secure and get approval of a mortgage loan or more beneficial mortgage terms. Inform your lending bank about your financial assets and/or real estate and produce documentary proofs, e.g. the excerpt out of the state real estate register or proof of rental income, securities gain, etc.
- Credit record in the home country (may be requested from any bank or credit bureau).
The bank may additionally request reference from the overseas employer or your utility bills as proof of address. Although not compulsorily required, these documents might help to get better mortgage terms.
Notarized copies of documents must be translated into Turkish or English (as required by a particular bank). The mortgage documents should be produced by both the borrower and the guarantor (if any).
After processing the mortgage application and initially produced documents, the bank issues preliminary mortgage approval and proceeds with property appraisal. At this stage, the applicant pays the appraisal fee. Following the appraisal, the bank makes its final offer of mortgage terms for a particular borrower and property. The borrower will have three weeks to agree to the mortgage terms and sign the offer. Over the next three months, the borrower must collect the following documents:
- Approval of the deal with the selected property by the Turkish Ministry of National Defence (Savunma Bakanligi) (compulsory).
- DASK insurance against natural disasters (compulsory).
- Property and life insurance (additional).
When all the documents are ready, one should make an appointment in the General Directorate of Land Registry and Cadastre of Turkey to transfer the ownership rights. Execution of the documents on the ownership right’s transfer must be attended by all the transaction parties: the seller, buyer (or his authorised representative), and bank clerk providing the agreement with the payment plan.
These are standard documents requested from all non-citizens regardless of their home country.
Mortgage repayment
The borrower opens an account with the lending bank to make monthly mortgage repayments. The bank makes monthly withdrawals from this account. Therefore, it is important to ensure there are enough funds in the account for mortgage payments. It is sufficient to produce the taxpayer number and notarized translated passport copy to open a bank account.
A bank account in Turkey may be replenished in several ways:
- By wire transfer from your bank account in the home country. Specify the name and address of the bank, the code of the bank unit, and IBAN (the international bank account number) of your Turkish bank account.
- Via online-banking of a Turkish bank. Most Turkish banks have English mobile apps or websites with personal accounts for customers to make any banking transactions online.
Step-by-step plan: registration will take about 2 months
Step 1. Collecting documents
Up to 5 days
Collect a set of documents in the country of residence (salary certificate, credit history, proof of real estate, assets and additional income, if any).
Step 2. Applying to a Turkish bank
1 day
Translate the documents and certify them with a Turkish notary. Apply for a mortgage loan. If you do not want to deal with paperwork personally, you can issue a power of attorney for a Turkish lawyer.
Step 3. Real estate appraisal
Up to 7 days
The selected property is evaluated by the bank's appraiser.
Step 4. Confirming the bank's mortgage offer
Up to 5 days
The bank prepares the final offer of mortgage terms within a few days. The applicant has 3 weeks to review and confirm the offer.
Step 5. Getting the Turkish Ministry of National Defence’s approval and insuring the property
Up to 3 months
All real estate purchasing deals with foreigners must be coordinated with the Turkish Ministry of National Defence. Compulsory insurance against natural disasters (DASK) will take no more than 1 day to procure.
Step 6. Registering the deal with the cadastral office and executing a mortgage agreement
Up to 5 days
Sign a tripartite agreement on the transfer of ownership in the General Directorate of Land Registry and Cadastre between the seller, buyer, and lending bank. Get a TAPU (a Turkish title deed).
Step 7. Opening an account for mortgage repayments
Up to 1 day
Mortgage repayments will be debited automatically from the borrower’s account at the lending bank. To open an account, you will need a Turkish tax number, which can be obtained within an hour at any tax office in Turkey.
Extra costs of Turkish mortgages
All the extra costs of getting a mortgage and closing the deal are paid by the applicant:
State duty for a TAPU | 40–70 $ |
|---|---|
Bank’s mortgage commission | 0.5–1% loan amount |
Property appraisal | 400–2 500 TL (27–170 $) |
Notarial and translation fees | 50–60 $ for each document |
Property and borrower’s life insurance | from 100 to 500 $ a year |
Instalment plans from developers as beneficial alternative to mortgages
Mortgage is the last resort to consider when acquiring real estate in Turkey due to the high rates. Over a ten-year mortgage term you will ultimately pay twice the price of your property. Instalment plans from developers are the best option right now.
Turkish developers give their clients an opportunity to buy properties by instalments. The compulsory down payment does not exceed 50% of the property price. The residual amount is to be paid by regular instalments made once a month or once every three months for up to three years. The repayment term impacts the discount provided by the developer. The buyer making a one-off repayment gets the maximum discount from the developer.
Turkish citizenship by real estate acquisition with mortgage or instalment plan
The investor seeking to obtain a Turkish passport must acquire one or several properties with a total cadastral value of at least 400,000 US dollars. The real estate ownership certificate (TAPU) serves as the legal grounds to obtain citizenship. The bank must confirm transfer of at least 400,000 US dollars for real estate acquisition. If the property is acquired with a mortgage loan, citizenship will be granted only after the repayments exceed the required threshold.
The buyer going with a payment instalment plan may apply for citizenship, but in this case a TAPU will be obtained only after instalments are made in full.
Read also:
FAQ about mortgages in Turkey
UPD: At the moment, foreigners cannot take out a mortgage in Turkey.
To take out a mortgage loan in Turkey, a foreigner needs to do the following: collect all the needed documents in their home country, translate and certify them with a Turkish notary, apply to the chosen bank, pay for the property’s verification and appraisal, receive and sign the bank’s offer, obtain the deal’s approval from the Turkish Ministry of National Defence, register the transaction in the cadastral office and sign the mortgage agreement.
It is possible. Banks accept mortgage applications from clients' attorneys acting by proxy and allow for execution of the mortgage agreement by such representatives, usually a real estate agent or a lawyer. Note that a notarized power of attorney must expressly specify the respective powers conferred on your representative.
It is possible. A mortgage loan for properties at the construction stage may be obtained from a lending bank bound by a contract with the respective developer. Ask your developer to provide you with a list of the partner banks for mortgages or instalment plans.
It is possible. The rental agreement must be approved by the lending bank. Banks approve renting out mortgaged apartments as rental income will be an additional guarantee for the bank. If the property is purchased on an instalment plan, there are no rental restrictions. After the down payment, you can immediately move in yourself or settle a tenant.
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