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Buying real estate in Turkey: loan or installments?

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If citizens of one of CIS countries are offered to choose between a loan or installments, of course, they will prefer the second option. This can be easily explained by that sometimes the interest rate is extremely unprofitable, followed by a huge overpayment. In Turkey, this situation is not so acute, because, in most cases, the loan interest is very attractive. In this article, we will tell you about the lending conditions and installments for the purchase of local real estate. 


Interest rates vary widely. They are affected by bank choices and currency. We advise you about taking a loan in euros. Some Turkish banks are ready to provide loans in any currency. On average, mortgage rates range from 6.6 to 7.8% per annum.


Lending procedure in a Turkish bank


A citizen of any country from 21 to 70 years old may apply for a loan. A prerequisite is the provision of solvency confirming documents. 


The Bank may give you only the sum that does not exceed 75% of the market value of the real estate you have chosen. The minimum amount set is about 10000 euros. 

You will have from one month to 15 years to repay the loan. The monthly payment should not exceed 30% of your confirmed income.


If your future apartment is under construction, it is better to buy it by installments from the developer, because, in this case, loans are rarely approved. This option is the most profitable one.


Be careful. If you decide to repay the loan ahead of schedule, you will have to pay 1-2% of the debt balance. It all depends on the remaining time. 


Apartment in Turkey by installments

We have mentioned installments from the developer if you buy an unfinished house. Sometimes you can even move into an apartment without paying the full amount of the loan. 

The conditions offered by developers are very attractive and beneficial to your budget. Now, this opportunity helps many people buy their dream apartment. 

How are documents for installments drawn up? 

The set of documents consists of passports of buyers and down payment. You are not required to confirm your solvency. You will not worry about additional costs, for instance, for the translation of documents, or about a refusal to provide an installment plan in the case of a loan. 

In the real estate sales agreement, the payment schedule must be prescribed. Usually, tranches are linked to certain dates, but sometimes some developers correlate payment with construction stages. The second option is more reliable.

Usually, the down payment is 5% of the total value of the real estate in euros or dollars. Further, the sum is distributed according to the approved schedule. The payment period can last from 6 months to 3 years. The construction stage, individual conditions of the developer, and, of course, the buyer’s preferences are considered. 

Recently, there have been cases when installments were provided for an already commissioned facility. However, another term is set: from 6 to 12 months.

It is your choice. Now you know, which option is more beneficial and convenient for you. 

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