Mortgages in Turkey: A Complete Guide for Foreign Buyers

Foreigners can purchase real estate in Turkey using a mortgage loan from Turkish banks, subject to specific terms and conditions. This guide explains the process, required documents, and key considerations.

Can Foreigners Get a Mortgage in Turkey?

Yes, Turkish banks offer mortgage loans to foreign buyers for residential or commercial properties. However, approval depends on the buyer’s financial status, nationality, and the property’s characteristics.

Key Features of Mortgages in Turkey

  1. Loan-to-Value Ratio (LTV):
    • Typically, banks finance up to 50%–70% of the property’s appraised value (Ekspertiz Raporu).
    • The buyer must pay the remaining amount as a down payment.
  2. Loan Term:
    • Generally ranges from 5 to 15 years, depending on the buyer’s financial capacity and bank policies.
  3. Interest Rates:
    • Mortgage interest rates in Turkey vary but are usually between 1.2%–2.5% monthly for foreign buyers. Rates can be fixed or variable.
  4. Currency:
    • Loans are available in Turkish Lira (TRY) and sometimes in Euros (EUR) or U.S. Dollars (USD), depending on the bank.

General Process for Getting a Mortgage

1. Choose a Property

  • Select a property that meets your needs and budget. Ensure it has a clear title deed (Tapu) and no legal encumbrances.

2. Research Mortgage Options

  • Compare mortgage options from different banks in Turkey. Consider factors like:
    • Interest rates.
    • Loan tenure.
    • Down payment requirements.
    • Additional costs.

3. Obtain a Real Estate Valuation Report

  • A licensed appraiser provides a valuation report (Ekspertiz Raporu) to determine the property’s market value.
  • Banks use this report to calculate the maximum loan amount.

4. Submit the Mortgage Application

  • Apply to the bank with the required documents.

Required Documents for Mortgage Application

  1. Passport (translated and notarized).
  2. Tax ID Number (obtained from the local tax office).
  3. Proof of Income:
    • Salary slips, tax returns, or bank statements (last 3–6 months).
  4. Real Estate Valuation Report:
    • Issued by a licensed appraiser.
  5. Property Title Deed Copy (Tapu):
    • Provided by the seller.
  6. Proof of Address:
    • Utility bill or rental agreement from your home country or Turkey.
  7. Bank Statements:
    • Showing sufficient funds for the down payment and initial fees.
  8. Application Form:
    • Completed at the bank.

Additional Documents for Foreign Buyers:

  • Residency permit (if applicable).
  • A guarantor or collateral (may be required by some banks).

5. Bank Assessment

  • The bank evaluates your financial situation, credit history, and the property details.
  • This process can take 1–3 weeks.

6. Approval and Offer Letter

  • If approved, the bank provides an offer letter outlining the loan amount, repayment terms, and interest rate.

7. Sign the Loan Agreement

  • Review the terms and sign the loan agreement with the bank.

8. Title Deed Transfer and Mortgage Registration

  • The title deed transfer takes place at the Tapu Office.
  • Simultaneously, the bank registers the mortgage on the title deed as collateral for the loan.

9. Start Repayments

  • Mortgage repayments typically begin 1 month after the loan disbursement.

Costs Associated with Mortgages

  1. Loan Processing Fee:
    • Usually 0.5%–1% of the loan amount.
  2. Property Appraisal Fee:
    • Ranges from 2,000–5,000 TRY, depending on the property.
  3. Mortgage Registration Fee:
    • Paid to the Tapu Office, approximately 0.4% of the loan amount.
  4. Insurance:
    • Earthquake insurance (DASK) is mandatory.
    • Additional property insurance or life insurance may be required by the bank.

Key Tips for Foreign Buyers

  1. Work with Experts:
    • Hire a real estate lawyer and consult mortgage specialists to navigate the process smoothly.
  2. Consider Your Budget:
    • Factor in the down payment, interest rates, and additional costs when planning your finances.
  3. Property Ownership Rights:
    • Ensure the property is eligible for purchase by foreigners (some areas, like military zones, are restricted).
  4. Repayment Currency:
    • Choose a loan in a currency that aligns with your income to minimize exchange rate risks.