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What are the financing models for a property acquisition?

The most common financing for property acquisitions is mortgage financing, under which the financing institution establishes a mortgage over the target property in consideration for a loan of up to approximately 75% of the market value of the target property. Foreign real persons are also entitled to benefit from this mortgage financing model offered by Turkish financial institutions.

What kind of loans am I offered?

There are fixed rate and floating rate loans both on the shelf. But fixed rate loan is common in Turkiye. So, by choosing the first one, you can pay your loan with equal monthly instalments and a fixed interest rate through the life of your loan. By doing so, a fixed interest rate enables you to learn the exact amount of your monthly instalments in advance and your loan will not be affected by volatile market conditions.


How establishment of a Mortgage is done?

A mortgage can only be established through an agreement in compliance with a certain official form. The official mortgage deed must be executed and registered by the parties before the relevant the land registry office.

The legal scheme concerning the establishment of liens on immovable properties, i.e. mortgages, is mainly regulated under the Turkish Civil Code numbered 4721 (the “TCC”). Pursuant to the local regulations, a mortgage can be established on an immovable property in order to secure current or future credits. A mortgage can only be established on real estate that is registered in the title deed registry. Foreign real persons can become the mortgagor without being subject to any approval.


As a foreigner which requirements should I meet for the mortgage? What are the application conditions?

To get any kind of loan, including mortgage, it is legally compulsory to be 18 years or older.  Even though incomplete houses are also subject of mortgage in some certain conditions, common practice requires that the property to be purchased must be ready to be occupied and have minimum right of easement. Maximum LTV is up to 75% of the value of the property that you are going to buy.

Even though 120 months is most preferred one, loan maturity for mortgages goes up to 180+ months.

As loan currency, you can prefer TRL, USD, EURO or some other convertible currencies if available. However, there are certain restrictions for foreign currency loans.


Is there a compulsory property insurance requirement?

According to the Law on Natural Disaster Insurance, “compulsory earthquake insurance” (DASK) must be held for the property. The title deed registries and the institutions providing utility services will not perform any transactions regarding the property if this compulsory insurance is not held. Apart from such mandatory insurance, the owner of the property may, at his/her own discretion, insure the property against risks, including, but not limited to, theft, fire, flood, storm, etc.


What are the other conditions to be remarked for financing?

In order to protect your property, mandatory earthquake insurance is required. For other possible risks; life insurance and home owners insurance are recommended.

A guarantor is not necessary at the time of application. However, a guarantor or co-borrower may be required as additional collateral. For fixed rate mortgages, a certain percentage of the pre-paid amount may be charged as a pre-payment penalty.


Following the approval, what are the phases to finalize the process?

There are three quick phases to finalize the process before title deed transfer.



If your loan application is approved by a financial institution (FI), there will be an appraisal process to determine value and confirm legal conformity of the property you are going to buy. The appraisal process is committed through the FI and finalized in a few days.


Pre-contractual Information Sheet

After the appraisal process is completed, you have to sign the precontractual information sheet. According to the Turkish Mortgage Law, the loan contract must be signed reasonable time after the pre-contractual information sheet has been signed. The pre-contractual information sheet contains all the important details of your loan, payment schedule, interest rate, principal amount, monthly instalments and all the fees.


Signing Loan Contract

Once the pre-contractual information sheet has been signed, a reasonable time later (one business day in practice) you can sign the loan contract, payment schedule and other credit documents. After you sign these documents, the pledge documents are prepared by the FI.

If all required documents are complete and accurate and submitted in a timely manner, it takes on average a week from the application date to disbursement day.


How is the disbursement and title deed process?

On date of appointment, the FI contiguously establishes the first degree lien on the property after registration of sale of the property in title deed office. Then the FI transfers the loan amount to the seller’s bank account or delivers a guaranteed check for the loan amount to the seller.

Sosyal Medyada Bizi Takip Edin !