Home Loan Steps
A home loan is the most common way to become a homeowner. Choosing the right loan type, term and interest rate can affect your total cost by hundreds of thousands of lira. This guide summarizes what you need to know before applying.
1. Get to Know the Loan Types
A home loan can have a fixed or variable interest rate. With a fixed rate, installments stay the same throughout the term; with a variable rate, installments are updated according to market conditions. In addition, some banks offer campaign products with low interest in the initial period.
For those who want to become homeowners, there may also be state-supported loan campaigns or campaigns specific to new housing projects. Follow current campaigns at the bank's branches or on its website.
Fixed Rate
The installment amount does not change over the term, making it easy to plan your budget.
Variable Rate
The interest rate changes with market conditions; the initial installment may be lower.
Campaign Loans
New projects or seasonal campaigns may offer the advantage of low interest and fees.
2. Check the Application Requirements
When you apply for a loan, banks assess your income, credit score, existing debts and length of employment. The monthly installment must not exceed a certain percentage of your net income.
The percentage of the property's value for which you can take a loan is determined by the appraisal value. The higher your down payment, the greater your chance of approval and your interest advantage.
- Age and Republic of Turkey citizenship or a valid residence permit requirement.
- Regular and documentable income.
- A sufficient credit score and no overdue debts.
3. Prepare the Required Documents
During the application you need to submit your income and identity documents to the bank. The title deed details of the home you will buy and the appraisal report are also requested during the process.
Gathering your documents before applying shortens the approval process to a few days.
Identification
Identity card (лична карта) or passport and proof of address.
Proof of Income
Payslip; for the self-employed, a tax certificate and income declaration.
Property Documents
Proof of ownership (нотариален акт), appraisal report and the insurance policy required by the bank.
4. Compare Interest and Fees
The monthly interest rate alone is not decisive. File fees, appraisal fees, life insurance, home insurance and mortgage registration costs are added to the total cost. Compare offers from different banks based on the total repayment.
With the calculator below, you can see your monthly installment, total repayment and total interest for different terms and interest rates.
Even a small difference in the monthly interest rate can create a cost difference of hundreds of thousands of lira over the long term.
5. Understand Your Payment Plan
In equal-installment loans, the monthly installment is fixed, but the share of principal and interest within it changes every month. In the early years, most of your payment goes to interest, and the principal share grows over time.
In your payment plan, you can see each month's installment number, the principal and interest portions, and your remaining debt.
6. Consider Early Repayment
When you come into extra income, paying off the loan early, partially or fully, reduces the interest burden. For early repayment, banks may charge an early repayment fee at certain rates in accordance with the regulations.
Before repaying early, consider the remaining debt, the fee amount and your investment alternatives together.
Partial Payment
A principal payment reduces the installment term or the installment amount.
Full Repayment
You get rid of the total interest burden and the mortgage is lifted.
Fee
Find out the early repayment fee rate from the bank before applying.