Gov’t announces cheaper mortgages for mid-income citizens

ANKARA

Mortgages with lower rates and longer maturities will be offered to middle-income Turkish citizens looking to buy their first houses, the government announced yesterday.

The mortgage loans with amount up to 5 million Turkish Liras ($266,800) will have up to 15 years of maturity and rates will start from 0.69 percent, Treasury and Finance Minister Nureddin Nebati said at a joint press conference with Environment, Urbanization and Climate Change Minister Murat Kurum to announce the “My New Home Program.”

The support will vary in three regions, with the maximum amount of financing to be provided to be 5 million liras in Istanbul and five other provinces in the first region, 3 million liras in the second region provinces and 2 million liras in the third region provinces. While the minimum down payment rate is determined as 10 percent, the financing will be provided with a maximum maturity of 15 years and with interest rates starting at 0.69 percent monthly.

“We prepared this program’ for middle-income citizens with advantageous rates, three-year Finance Ministry support in payments and a household income-based payment plan,” Nebati said.

The loans with favorable rates will be extended to new housing, before, during, or after construction, the minister also said.

“Citizens who want to buy a house in Istanbul, Ankara, İzmir, Antalya, Bursa, Mersin and Muğla will have to have resided there for the last year, and they should not own a house, and they should not have sold a house in the last year,” Nebati noted.

“Citizens will be able to use loans for houses that have been completed, have been completed to a certain extent, and those to be built that comply with the lending criteria of banks,” he said.

“Price increases in the real estate sector will be followed. Persons who are found to have made an unfair price increase will be shared with the relevant units for necessary action.”

Kurum said that the aim of the campaign is to make 100,000 families homeowners in a very short time in the first stage.

“It will be possible to buy houses in new projects that have been completed all over our country, have been completed to a certain extent, and have signed a guarantor agreement with banks,” he said.

“The monthly installments will not exceed 40 percent of the household income. Thanks to this campaign, a volume of billions of liras will emerge and an added value of approximately 600 billion liras will be created in our economy.”

Last year, the government launched a major social housing project to build tens of thousands of homes for low-income groups. Some 5 million people applied to buy a house from the social housing project under which 500,000 homes will be developed between 2023 and 2028.

The government is initiating those projects to bring the skyrocketing home prices and rents under control by increasing the supply in the market.

Residential property prices increased by 188 percent in October 2022 from a year ago, recent data from the Central Bank showed.