Housing loan interest rates have reached their lowest level in 18 months, dropping below 3%. Despite the decline, experts noted that the rates are still above the ideal level.

The average interest rate on housing loans offered by banks decreased to a record low of 39.25% in the week of March 21. The results of the disinflation program implemented by the economic management for 1.5 years reflected in the data, with inflation rising to 71.6% in June 2024 falling to 39.05% in February. Following this decline, the Central Bank of the Republic of Turkey (CBRT) acted and reduced the policy rate, one-week repo auction interest rate by 250 basis points to 42.50% in the latest Monetary Policy Committee (MPC) meeting. Thus, there has been a total of 500 basis points reduction in the past two meetings. The rate cuts by the CBRT also affected the interest rates of housing loans offered by banks.

PEAK ON APRIL 5 According to data from the Central Bank, the average interest rate on housing loans offered by banks decreased to 39.25% in the week of March 21, marking the lowest level in 18 months. The previous low rate was 38.85% on September 8, 2023. The highest rate was 45.14% in the week of April 5, 2024. MONTHLY INTEREST BELOW 3% Just a few months ago, the lowest housing loan interest rate in banks was 3.05%, which has now decreased to 2.59%. This led to the monthly payment for a 10-year, 1 million lira loan dropping from 31,352 lira to 27,163 lira. The total payment reduced by 502,000 lira to 3,260,000 lira. LOAN SALES HIT THE BOTTOM Although the interest rates are at an 18-month low and have dropped to as low as 2.59% monthly, this rate is still above the figures seen as ideal by industry representatives – below 1%. Due to the high interest rates in recent times, the share of mortgage housing sales in the total had remained at its lowest level since data started being released in 2013. This rate had previously risen to 39.8% in past years, then dropped to 10.7% in 2024, and increased to 14.7% in the first 2 months of this year.