In a move aimed at curbing rising real estate prices, Turkey’s Banking Regulation and Supervision Agency (BDDK) has introduced new restrictions on mortgages for second homes, the state-run TRT reported on Friday.
As a result of the decision, consumers who want to buy a second home will now face tighter credit limits and will have to make a larger down payment.
Under the new rule, individuals who already own a property in their name, the name of their spouse or the name of a dependent child under the age of 18 will receive a lower mortgage limit when purchasing a second property. This means that the amount of credit available for the second property will be 75 percent lower than under the previous criteria. However, this restriction does not apply to first-time homebuyers.
Under the BDDK measures, new mortgages can be extended for newly constructed properties worth up to 5 million Turkish lira ($188,326) with a limit of up to 22.5 percent of the property value. For properties worth between 5 and 10 million Turkish lira ($372,650), the loan limit is capped at 20 percent of the property value.
The new regulations also apply to banks that broker mortgages for second homes.
The BDDK decision aims to curb potential speculative activity in the real estate market and increase financial stability by encouraging larger down payments for the purchase of second homes. First-time homebuyers, however, are unaffected by these changes and can continue to take out mortgages under the previous conditions.
Source: Turkish Minute
