The interest rates on housing loans have reached their lowest levels in 18 months, falling below 3% monthly. Despite the decline, experts note that the rates are still above the ideal level.

The average interest rate applied on housing loans opened by banks for the week of March 21 fell to 39.25%, marking an 18-month low. As the outcomes of the disinflation program implemented by the economic management over the past 1.5 years reflect in the data, inflation, which rose to 71.6% in June 2024, dropped to 39.05% in February. Following this decrease, the Central Bank of Turkey (CBRT) took action by lowering the policy rate, one-week repo auction interest rate, by 250 basis points to 42.50% during the latest Monetary Policy Committee (MPC) meeting. Thus, a total reduction of 500 basis points has been made in the last two meetings. The cuts made by the CBRT were also reflected in the interest rates of housing loans provided by banks.

REACHED PEAK ON APRIL 5 According to Central Bank data, the average interest rate applied on housing loans opened by banks fell to 39.25% in the week of March 21, marking an 18-month low. This figure was recorded as the lowest level in 18 months. The previous low figure was 38.85% on September 8, 2023. The highest rate was 45.14% in the week of April 5, 2024. INTEREST BELOW 3% MONTHLY Until a few months ago, the lowest housing loan interest rate in banks was 3.05%, which has now dropped to 2.59%. As a result, the monthly payment for a 10-year, 1 million lira loan decreased from 31,352 lira to 27,163 lira. The total amount paid also decreased by 502,000 lira to 3,260,000 lira. SALES WITH CREDIT HIT ROCK BOTTOM Despite the interest rates being at their lowest in 18 months and dropping to as low as 2.59% monthly, this rate is still higher than the rates below 1% considered ideal by industry representatives. Due to the high interest rates in recent times, the share of mortgaged housing sales from the total sales plummeted to the lowest level since the data began to be disclosed in 2013. While this rate rose to 39.8% in previous years, it dropped to 10.7% in 2024 and then rose to 14.7% in the first 2 months of this year.