Buying Guide – Turkey

Lending criteria

In Turkey, the land registry is efficient and reliable. The title deed is an indisputable proof of ownership. TAPU is the name of this official document, also containing detailed information such as ownership rights and mortgage registration.

Before buying in Turkey, you have to make sure that the property you desire is neither in a military area nor of historical importance. As a foreign individual, you cannot own more than 2.5ha in Turkey.

Equal ownership rights whether you are Turkish or not. When you acquire real estate in Turkey, you will have the same property ownership rights as a Turkish citizen. All official documents are written in Turkish. During the transaction process, you will have to sign contracts in Turkish. Because of this, a qualified translator is mandatory.

Mortgages are available in Euro and will be secured against Turkish residential property.  Turkish mortgages will require full disclosure of income, outgoings and savings.

The maximum loan to value available is 70% of the purchase price, or valuation, whichever is the lower.

Turkish lenders assess eligibility on the applicant's capacity to repay the mortgage, as well as recent credit history.  As a guideline, your debt to income ratio should not exceed 35% of your gross monthly income; however there may be a degree of flexibility in this for certain types of applicant.  Mortgage, rent, personal loans and maintenance commitments are all considered as outgoings.  To find out how much you can borrow and for a formal decision in principle, please click on Apply Now.

Types of mortgage

Mortgages can be obtained for the purchase of new or existing properties. Some lenders impose restrictions on the areas property can be purchased in, so please contact us, to confirm current lending criteria.  

Mortgage products

A variety of products are available. Both interest-only and repayment mortgages can be arranged, on a variable or fixed-rate basis, or a combination of both. Terms can be from 7 to 20 years; however loans must be repaid by the age of 70.  Many of our products do not have any early redemption penalties.   For an idea of the rates available please contact us, or for a personalised quotation by clicking on Apply Now.

Documentation you will be required to provide

• Proof of identity (passports, driving licence, or other suitable photo ID.)

• Proof of residence (utility bill, bank statement etc. dated within the last 3 months)

• Proof of income (latest payslip, tax return, copy of accounts etc.)

• Proof of existing mortgage or rent payments (usually covering the last 12 months)

• Proof of deposit (last 60 days bank statements showing source of funds)

• Bank statements (usually last 60 days to show salary credits and outgoings)

• Property details (copy of sales particulars, or sales contract)

Documents will need to be either original or certified copies. Items such as passports and driving licences will need to be in date at the time the mortgage is due to complete or close.

Steps to buying in Turkey

1. Find your property. Professional real estate agents and property developers can advise you on a wide range of properties in Turkey. At this stage, please make sure you can obtain the ISKAN Belgesi, the construction utilisation licence for the property.

2. Contact us. To discuss your needs with a personal mortgage adviser and build together your financial plan. You will receive a detailed quotation on the basis of the information you provide.

3. Appoint a Turkish solicitor. He will be your local correspondent throughout the transaction process. This is a vital step and we will be happy to help you by providing details of English speaking solicitors in Turkey.

4. Sign a preliminary sales agreement. Although it is not compulsory, we recommend that you sign this document. Once you have signed your preliminary sales agreement, no one else will be able to buy the property you have chosen, unless a right in favour of a third party is established on the property. The necessary information on the existence of such right can be obtained from the related Registry of Title Deeds.

5. Get a Tax ID Number for the local tax office. Your Turkish Tax ID is mandatory to open your bank account in Turkey and will allow you to be registered for electricity, water and telephone. Your bank in Turkey can help you to get your Tax ID number.

6. Open a Turkish bank account, which should be used to pay the mortgage as wells other items, including building and contents insurance and fund transfers.

7. Get the military zoning permission from the land registry office. The document given by the Army states the property is not located in a Turkish Military zone. Obtaining this permission can take up to 8 weeks.

8. Complete the mortgage application and life assurance forms. Return them to us together with the supporting documentation required. After processing your application, if your request is accepted, we will issue you a loan offer.

9. Wait at least 10 days, but no more than 30, before accepting the loan offer (cooling off period). All you need to do then is sign the documents and return them to us. The mortgage funds will then be transferred to your bank account and blocked until the date of signing of the final deed. A cheque corresponding to the loan amount will be issued by the lender to be given on that date to the seller through the lender’s legal representative.

The Title Deed Office will prepare the final deeds for the ownership transfer and the mortgage registration. You will need to fix a date for the signing of the final deeds with the seller and the deed officer. All you have to do then is sign the relevant documentation and you will be the owner of your Turkish home.

Timeframe

We will issue a decision in principle within 48 hours of receiving a fully completed application. 

The processing time from the application being received by the lender to completion or closing is approximately 12 weeks.

Life assurance

Life assurance is compulsory in Turkey.  If you would like to receive a quotation for life cover please contact us and we recommend a provider to organise an illustration for you.

Buildings insurance

This is a compulsory part of the mortgage process, and can normally be taken through the lender or via an approved third party insurance company. This will need to be in place for when the mortgage completes or closes. Please contact us for an illustration.

Bank account

You will need to open a Turkish bank account before completion, from which your mortgage repayments will be debited. This can also be used for utility bills, taxes etc. We can assist you in opening an account.

Payment of your Turkish mortgage

Please be aware that missing a mortgage payment in Turkey may have serious consequences and we therefore strongly advise you arrange for monthly debits from your local bank account. A number of foreign exchange providers offer a renewable 12 month regular payment plan. The exchange rate is fixed at the start of the plan, and the agreed amount will be debited from your local account and sent to your Turkish account each month. This service gives you peace of mind in the knowledge that your mortgage repayments will be met automatically each month. Please contact us to recommend a provider if this is of interest.

Transferring funds to Turkey

Whilst purchasing your Turkish property it is also likely that you will need to transfer funds to Turkey, to pay a reservation fee, a deposit on the property, or to cover additional purchase costs.
Making payments in a foreign currency will mean you are exposed to movements in exchange rates. This is likely to affect the final cost of the property you are buying, as will the exchange rate you receive when you make the transfer.

Through our carefully selected foreign exchange provider we are able to not only save money on the exchange rate you receive but reduce your exposure to exchange rate movement.

For further information on how these services can benefit you please contact us and we will be able to answer any questions you may have.

Completion

You do not have to be present at completion and can give Power of Attorney if necessary. Your lawyer will be able to discuss this with you in more detail.

Costs of setting up a Turkish mortgage

Bank’s arrangement fee: Typically 1% of the loan amount

Valuation fee – will vary depending upon the purchase price

Legal fees – approximately 1% of the purchase price

Notary fees – your Notary can provide you with a breakdown of the fees payable on request.

Taxes - If you take out a Turkish mortgage, a further cost will be a purchase tax of 1.5%.

Buildings insurance – is payable to provide basic cover for the duration of the mortgage.

We charge a non-refundable application fee of £150.  A further fee may be payable on completion of the mortgage.  Please refer to your personalised quotation for confirmation.

We recommend that you seek professional, legal & tax advice before purchasing in Turkey

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it. Be sure that you can afford the repayments before entering into any credit agreement. Any quotation supplied is not an offer of mortgage and may be subject to a change without notice. Exchange rate movements may increase the Sterling or home currency equivalent of your liability under a foreign currency mortgage.