Getting a Mortgage in Turkey

– The Facts

Buying a property in an emerging market like Turkey is a different process than doing so in a more developed market like France or Spain. More than ever therefore, you need to be prepared and have good Advisers with you to avoid you making a very expensive mistake. Here’s our Introductory guide to the things you need to think of when buying a property in Turkey:

How much can I borrow?

The maximum amount you can borrow with a Turkish mortgage is 75% of the value of the property. Unfortunately we are not currently able to offer remortgages in Turkey.

What are the Interest Rates?

Interest Rates in Turkey are much higher (and tend to move more frequently) than the UK. Similar to the UK though, there I a wide choice of mortgages out there so an exact rate will depend on your personal circumstances. The range is from about 5.3%-7.5% but get in touch so we can see what deal is available to you.

Are there any income requirements?

Like most of Europe, Turkish banks have strict affordability criteria. This means that, including the mortgage you are applying for, the total of all interest payments you have to make on your debts (inculding your UK mortgage and any other personal loans you have) cannot be more than 35% of your net income.

What else do I need to know about Turkish mortgages?

The terms of mortgages in Turkey are slightly shorter, generally no longer than 20 years and they have to be full-status loans (i.e. you need to have a verifiable source of income, like a job)

How do negotiations work?

If there’s one piece of advice we could offer you when buying a property in Turkey it’s: haggle! It’s part of the culture and, frankly, sort of frowned upon if you don’t. It may not be the most British of things t do but we suggest this is one local custom you adopt quickly – it could save you thousands!

What is the Legal process like?

Here’s where you need to be very careful. Many properties in Turkey do not have title deeds or planning permission or have simply been constructed illegally! Even if they are legal there are various forms of “title” giving different land ownership rights. For this reason it’s extremely important to use a quality Agent and obviously we can put you in touch with some of these.

Once you’ve found your property the procedure should go like this:

• Reservation Contract: This takes the property off the market for 2-4 weeks so the Buyer’s legal representative can conduct the required Searches.
• Preliminary Report: After the Reservation Contract is signed and the required fee paid, you get a Preliminary Report with all the legal checks. If you’re happy with it you sign it and pay a deposit on the property, typically 10% for a resale property or 30% if you’re buying off-plan. At this point too you must approach the Vendor and ask him to apply for permission for you to buy a property in Turkey.
• Completion: Once everyone is ready to proceed the property sale is completed. The Buyer pays relevant taxes and the Deed of Sale (Tapu) is signed transferring ownership to the Buyer. This is usually done at the local Land Registry Office. Congratulations! You now own a little piece of the Anatolian peninsula!

Yes, it’s a little trickier than other countries but rest assured that we will put you in touch with competent English speaking Advisors to guide you through the process and help you avoid the pitfalls. Fill in the form opposite and get in touch!

Lastly, for your foreign exchange requirements we recommend the guys at Sterling Exchange. Please call Daniel or Kyri on 020 7329 9977 and mention Choice Loans in order to avail of rates that will be far better than your bank will offer you.

Overseas Mortgage are not regulated by the Financial Services Authority, nor are they protected by the Financial Ombudsman Service or Financial Services Compensation Scheme. They may not be covered by the home regulator of the country concerned either, so you should consider the risks carefully.