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How to get a mortgage in Turkey as a foreigner! [Infographic]

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How to get a mortgage in Turkey as a foreigner! [Infographic]


It would probably come as unbelievable to many if we’d say that, in a country such as Turkey, where acquiring a property is the primary dream of almost everyone, to get it with a mortgage was unthinkable just about 15 years ago!

The property market in Turkey moved mainly based on cash purchases, and no one would ever even think about applying for a mortgage.

However, with the Turkish economy growing rapidly in early 2000s and with the implementation of new financial regulations allowed Turkish banks to offer mortgages, which were greatly welcome by the masses eager and capable now to access the property market.

Once the system opened its doors to the local market, the turn was now to offer the same advantages to the thousands of overseas property buyers interested in acquiring a property in Turkey.

So, if you are also interested in financing the purchase of your new property in Turkey, it might be worth reading this step by step guide to how to get a mortgage in Turkey!

Can I get a mortgage in Turkey?

Unless you are a national of a few sensible countries such as Iran , Syria, Cuba or North Korea, you have right to apply for a mortgage in Turkey.

Iran nationals HAVE right to purchase a property in Turkey, but cant apply for a mortgage as of current 2018 Turkish financial and banking laws.

Click here to see which nationalities can buy a property in Turkey

What are the documents needed to apply for a mortgage in Turkey?

Documents needed to apply for a mortgage are different depending if you are and EMPLOYEE or an EMPLOYER.

Documents needed from Employees ;

  • Salary statement from your Company
  • Bank statement for the last 6 months prior to application
  • Proof of residency via utility bill (Should be no older than 3 months prior to application)

Documents needed from Employers ;

  • Company Income statement for the last 2 years
  • Personal Bank statement for the last 6 months prior to application
  • Company registration and trade details incl. shares in the Company
  • Proof of residency via utility bill (Should be no older than 3 months prior to application)
  • Property deeds and  various proof of asset ownership.

Please bear in mind that, unless the documents are already in English, a sworn translator MUST translate all documents provided to the bank into English OR Turkish. This could be done either in your country or residence or in Turkey.

Is there a monetary limit to what I can get from the Bank?

The limit of your mortgage will be decided based on your monthly income (for employees) or income statement (for employers). Very basically, the amount of your monthly repayment cannot be over 1/3 of your monthly income.

Should I apply for a mortgage before or after choosing my property?

The mortgage process works in 2 parts;

  • The application to check if you are eligible for a mortgage
  • The release of the funds once the property has been valued by the bank

In other words, it might be a good idea to start with making an initial application in order to make sure that the bank agrees to give you a mortgage. Once approved, you can peacefully start looking for your ideal property knowing that the bank will back you up once you have found it.

My application has been approved and I have found my property, whats next?

Your application for a mortgage has been approved and you have found your dream property. It is now the turn for the bank to go and value the property and calculate how much they will be willing to loan you.

As this is a crucial part, it is important to explain clearly how the process will work. For the purpose of simplicity and better understanding, let’s use a simple example;

We will assume for this example that your dream property in Turkey price is 100.000 EUR

  • The bank will give a mortgage up to 65% LTV (Loan To Value)

     This means that the bank will give up to 65% of the valuation it will do on the property, independent from the agreed purchase price.

  • The bank will independently valuate the agreed property

     This means that the bank will do an independent valuation of the property, on which it will base its calculations on how much it will finally loan you.
     It is important to note that the bank will almost always valuate the property (on average) %15 – 20% less than the agreed purchase price. In other words, there are great many chances that the bank will valuate our 100.000 EUR property for +/- 80.000 EUR.

  • The loan will be based on the valuation

     Based on our reference property whose price was agreed to 100.000 EUR, the bank has valued it for 80.000 EUR and will give up to 65% LTV, which is equal to 52.000 EUR.

     This, in other words, means that, while the bank finances the property up to 52.000 EUR, our imaginary buyer will have to fund him/herself the remaining 48.000 EUR in order to meet the asking price of 100.000 EUR.

  • It’s now your turn to agree on the loan period which may go up to 10 years

     Once the valuation done, and all parties agree with the terms, it’s the final stage of agreeing on the length of the loan and final signatures. The loan may not be less than a full calendar year, and may go up to 10 years if wanted so.

  • The funds will only be released once you have deposited your share of the deal in your account.

     The bank, before releasing the funds, will be asking to see your funds in your account, which you will have to deposit to your account at the branch of the bank where you have applied for a mortgage.

     Based on our example, our imaginary buyer will have to deposit its 48.000 EUR into his account, upon which the bank will release the remaining of 52.000 EUR to meet with the agreed buying price of 100.000 EUR.

Assuming that all funds are ready, the whole process, from application to release of the funds takes +/- 7-10 days.

Please note that, although the process is explained as close to reality as possible, all numbers have been used for explanatory purposes and will vary depending on terms and regulations on time of application and based on income statements shared with the bank.

So, how about interest rates?

Mortgage interest rates vary in between 5% and 9% yearly depending on currency you will be applying for.

Fixed or variable interest rate?

Non-Turkish can ONLY get a mortgage with a fixed interest rate.

In which currency can I get a mortgage?

You can apply for a mortgage in Turkish Lira, as well as Euro, USD and GBP.

Is there an age limit for applying for a mortgage in Turkey?

As per current regulations only those no less than 18 years and no more than 80 years old are eligible for a mortgage in Turkey.

Can I get %100 LTV?

NO, as per current regulations, you can get up to 65% LTV.

Any penalty fees should I close my mortgage before the end period (Early repayment)?

YES, usually banks will charge +/- 2% based on lent sum should you close your mortgage prior to the end period.

Do all banks in Turkey give mortgage to non-nationals?

NO, only a few selected private banks give mortgage to non-turkish. Please contact us for recommendations on the best banks to work with.

Are there any Islamic banks in Turkey giving mortgages?

YES, there are Islamic banks in Turkey, which we could recommend providing non-Turkish with mortgages.

Do I have to be personally present to apply and get a mortgage?

NO, you can also appoint a legal representative in Turkey, via a notarized Power of Attorney, who can apply and get a mortgage on your behalf. Please contact us for further details on how to apply for a mortgage with a Power of Attorney.

Can I re-mortgage my property?

NO, current regulations do not allow you to re-mortgage your property.

Can I get a mortgage on my Company registered outside of Turkey?

NO, current regulations make it quite hard to get a mortgage for a Company outside of Turkey. Please contact us for details should you wish to get more details on this matter.

We, as Capitol Estate, have helped over a thousand overseas property buyers acquiring their dream property in Turkey. With in-depth knowledge of the market and very close ties with several large banks in Turkey, we will be happy to give you further information on ways to apply and for a mortgage in Turkey.

Contact us NOW if you'd like to know more about how to get a mortgage in Turkey and learn on various ways we can help you to get it!

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TOLGA OZCAN is the Co founder of Capitol Estate. Follow him on Twitter or Facebook, subscribe to our blog and be first to read when he posts a new article in the blog.

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