Last Updated on 08/05/2023
Financing is a crucial issue to consider when thinking about purchasing a property. In this situation, getting a mortgage in Turkey for foreigners might be a good alternative with beneficial incentives. In fact, Turkish banks make made it simpler with their attractive mortgage options. Turkish banks offer mortgages to borrowers up to 75% of the property value. You will find in this article an ultimate guide for everything you need to know regarding mortgages in Turkey for foreigners. Just keep reading.
Mortgage Laws in Turkey?
A mortgage in Turkey for foreigners is a loan that is given by a bank or a mortgage lender. While it is legal to obtain loans to cover the entire cost of a property, it is more typical to do so for a portion of the value. The applicant must repay the funds on a specific schedule. And the purchased property continues to serve as a guarantee for the bank.
The “fixed ranks system” is used in the Turkish Civil Code to determine how secured creditors (mortgagees) are ranked against one another. As a result, the debtor may divide the market value of its assets into “fictitious” sections in the Registry of Land Titles and may independently issue security interests on each portion. For instance, the debtor could reserve the first position and provide a creditor security interest at the second rank. If there are multiple mortgagees with security interests in the same property, their set ranks will determine which creditors are ranked first among them.
Can Foreigners get a Mortgage in Turkey?
Absolutely, foreigners can obtain mortgages in Turkey. In order to get consumer loans, vehicle loans, and mortgage loans, foreigners can apply to Turkish banks. For this, there are a few things that foreigners need to be aware of and some paperwork that they need to submit to the banks.
To start a business, purchase a home in Turkey, or fulfill some other necessity, foreign people can apply for loans at banks. Even though Turkish banks have a history of having trouble lending to foreigners, they have recently revised their stance in response to the government’s recent policy of encouraging foreign investment and are now more willing to do so.
Banks have begun lending to foreigners who meet specific requirements because of the recent significant growth in the number of foreigners residing within Turkey’s borders. Moreover, foreigners have begun investing in real estate in Turkey as a result of the opportunities provided to them in light of recent political and economic changes in Turkey. In addition, the chance to gain Turkish citizenship by investment has been extended by the state to foreigners. In this situation, bank home loan requests from foreign nationals are the highest. Furthermore, foreigners who apply for loans from Turkish banks tend to have easier access to credit if they are citizens of European or US countries.
Related: Can Foreigners Buy Property In Turkey?
Procedure for Getting a Mortgage for Foreigners
The procedure for a mortgage in Turkey for foreigners is almost just like in any other country. Therefore, interested persons must have a strong credit history.
Moreover, you can expect, a sizable amount of paperwork to complete this type of transaction. While applying for a mortgage in Turkey, you could be required to submit the following documentation:
- Evidence of income such as bank statements
- Individual income tax returns
- a valid passport
- If you are already a resident of Turkey, you must present proof of your residency.
- Tax documentation if you’re a tax resident in Turkey
Further documentation may also be necessary while applying for a mortgage in Turkey for foreigners based on the bank or financing company you are dealing with, And your position in Turkey. Yet, the typical procedure for foreigners seeking a mortgage in Turkey starts by deciding the budget and what one can afford. Then, the interested person should contact directly a Turkish bank or an advisor to assist him with the application. Moreover, you should get a tax number.
Check the TAPU with the Land Registry and apply there to sign the contract. Then finalize and sign the agreement. After that, make the down payment or deposit with the bank and complete the mortgage application. When the TAPU is complete, pay your property’s taxes and other debts.
In Turkey, buying a home with a mortgage can be a protracted procedure, just like in any other country. Along the way, there will likely be many questions and a ton of documentation that needs to be filled out. The good news is that it is highly likely for a foreigner to purchase a house with a mortgage in Turkey if they meet the minimal requirements for one and can supply all the necessary papers.
Related: How to bring a car to Turkey as a foreigner
Turkey Mortgage Calculator
Most Turkish banks do provide mortgage in Turkey for foreigners. Many people who need a mortgage and wish to purchase real estate in Turkey will contact the Turkish branch of an international bank like HSBC. Another choice is to submit an application directly to a Turkish bank that provides mortgage financing to foreigners. All these banks provide on their website a free mortgage calculator. Here are some that might help you.
As with any bank in your home country, make careful to weigh all of your options because you might find that one offers a better bargain than the others.
Turkey Mortgage Rates
In the Republic of Turkey, mortgage interest rates range from 6 to 15% annually. They vary according to certain factors mainly the amount and the duration of the loan. Moreover, the capacity of the borrower, the down payment, and the currency also influence the mortgage rate.
The rate fluctuates from 11 to 15% annually if you apply for a mortgage in Turkish Lira, although exchange currency swings can have an impact. Due to this, getting mortgage in Turkey for foreigners is more beneficial in stable currencies like the dollar or euro.
FAQ
What is the property tax in turkey for foreigners?
The property purchasing tax in Turkey is 4% shared equally between the buyer and the seller. Learn more about Turkey property tax.
Do Turkish banks give loans to foreigners?
Yes, many banks such as HSBC, Garanti BBVA, and Akbank give loans to foreigners under certain conditions.
