I´ve heard that getting a mortgage to buy a house is not common in Turkey. I wonder how people can buy a house paying cash, I definitely couldn´t have mine without my mortgage (and I think 99% of the people here). How do you do that? Do you save for 30, 40 years and then buy? Are most houses not owned but rented? Is not getting / wanting a mortgage all about interest (which seems not allowed in Islam, I´m told)?

On Turkishdailynews.com I noticed an ad from Denizbank, that offers mortgages for foreigners. Huh? Only for foreigners? Are Turkish people not allowed by that bank?

Can anyone tell me please? (I might want to buy a second home in Turkey when I´m retired....   )

Hi Trudy

Mortgages have not been common in Turkey.  It is only in the last few years they have been available, and only for those with a large enough pay cheque for the banks to consider them an adequate security risk.

The reason is not the fact of interest, although some muslim finance companies have started the takafel mortgage.  It is that with rampant inflation, and rapidly changing rates of interest in the market, banks could not lend long term as no one could predict what inflation and interest rates would be in 5 years time, let alone 10 or 20.  In the last few years inflation has fallen and interest rates are more stable, so a mortgage market has begn to emerge.  Still it is in its infancy, and normally 5 or 10 year mortgages are the maximum length.

The ad you saw is for a new development.  Banks would only lend to Turks, but now some of them are starting to lend to foreigners.  Denizbank is advertising that fact, in an English language paper.

In the past the kooperatif method was normal.  It is like a reverse mortgage.  With a mortgage you move in at the beginnng and make small(er!) payments every month.  With a kooperatif you make payments every month and at the end you move in.  20 or 30 people, say, get together with a developer. Every month, with the money they pay, the developer can build a bit more of the apartment block. e.g. he puts up another floor, or tiles the roof, or puts in the windows etc. at the end of 5 or 6 years, the apartment block is ready and people can move in.

If I read your explanation, Marion, I´m very happy with my 30-year long mortgage and a fixed interest for 10 years at only 3,9%! After ten years (now 7) I have to set new interest again, depending of the rates I can choose between monthly changing, fixed for 1, 2, 5, 10, 15 and 20 years. 10 years is most common here. When I signed my contract interest was at 3,9 and now it is already 5,2! Hopefully it will decrease again...

Great question and wonderful explaination!!

Thank you both for the information. Very interesting!!

Whatever you do don´t join any kooperatif. A kooperatif means there are no houses yet but you sign an agreement with a building company and start paying monthly payments. You are hoping that they will build the houses or flats in the given time which is one year or two according the agreement but this almost never happens. Usually they require higher payments than you agreed at first. Also the construction goes on and on for many more years and sometimes they don´t build anything at all for a few years. Sometimes they build 80 houses to the same land which should have 50 according the plan.

If you want to get scammed the easiest way is to join a kooperatif. Nobody is going to protect you against scammy building companies. Local councils work for them. Corruption is at its highest level. No law is going to protect you if you join a kooperatif.  Many politicians are ex building company bosses. The parliement is full with them and they only introduce rules that would protect themselves.

i was told through a bank that interturk estate agent uses i would be able to get a mortgage for up to 20 years for 65/70% of the propertys value as a foreigner  providing you are 70 by the time it finishes  

Erdinç, if a kooperatif is a scam and like Marion said a mortgage is hard to get because banks are afraid of inflation, what options do you have? I assume very few people can pay cash 100.000 euro or more when they get married at the age of around 25.

BTW, I wonder what prices are for houses in Turkey. If I search on real estate brokers sites prices are quite high, sometimes even higher than here in the Netherlands, not only in coastal cities but also in Istanbul. For example, my apartment is 75 m2, has a livingroom, 2 bedrooms, a half-open kitchen, a bathroom, seperate toilet, a balcony and a place in the basement for bicycles and storage. I live on the edge of the city centre, in a shopping area, next to several types of public transport. What would an apartment like that cost in Turkey?

Hi Trudy

I have often wanted to ask the questions you´ve been asking about property.

This summer I stayed with friends in Adapazarı and my friend´s husband is a builder/developer.  They live on a site he developed and it is beautiful.  He is now developing a site a few hundred yards away.  These sites have security gates and a guard in attendance at all times.  Beautiful trees (some willows ) have also been planted around and a children´splay area is right by the security guard gatehouse.

I looked around the new site and some of the apartments (built in blocks of 4 - 2 upper and 2 lower).  There were also some conventional houses.

The apartments had: large bathroom with conventional toilet; turkish toilet; large kitchen; very spacious living room; 2/3 good sized bedrooms; 2 balconies; utility; outside storage.  I asked the price and the reply was 100,000YTL.  Adapazarı is not what you would call a tourist area but these apartments are not in the centre of the city and there are many green fields around.  I mentioned that I would like one of the many houses I saw in the countryside and I was told these are much cheaper.  I think there can be some complication with land ownership in Turkey, and I wonder if that relates more to property in the countryside.  In the U.K. houses in the country are more expensive.

I remember another friend in Adapazarı, who has a semi detached house (duplex) with Large living space and 4 bedrooms, set on one of the sites I mentioned above.  He said he would have to pay 10 times more for the same thing in Istanbul (I didn´t ask the price).

Thanks Peacetrain. It makes things a little more clear. Here houses in the city are more expensive than in the countryside, for 200.000 euro you have here a nice 3-room apartment and in the countryside a stand alone house! The idea of a second house in Turkey will be a dream for quite some years, now I can´t afford it.

I can´t afford either at the moment, but maybe in 5 years .  Knowing my luck, prices will have soared by then .