Home loan applications increased by 300% after interest rate cut

Home loan applications increased by 300% after interest rate cut
30 September 2019

Following the cuts in interest rates, consumers turned to home loans. Demand for home loans, which has been low since August 2018 due to high-interest rates, has tripled. Credit housing sales reached 35 thousand monthly after the interest rate cut.

*** This release is originally published in Turkish.
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ISTANBUL (TR) - The decision of the Central Bank to cut the policy interest rates with the decision of the policy rate cut has triggered those who are waiting for credit cuts to buy housing. According to housing loan data, online loan applications increased by 300% with the announcement of interest rate cuts, while 200 thousand people compare the loan interest rates of banks online. The most demanded loan for housing loans is 125.000 TL and the average maturity is 8.5 years. While 71% of those applying for housing loans are married, 80% of the applications are made by men. Most of the applications for housing loans come from Istanbul, where 22% of the total applications are made.

Last year, the increase in loan interest rates, the sale of credit home to 35 thousand per month to 10 thousand units had decreased. At the beginning of 2019, credit house sales decreased to below 7 thousand units per month. In addition to the housing campaigns carried out in March and April, interest rate cuts in July and September increased the number of credit home sales to 35,000 monthly.

Average market share in housing loans 1,41%

Stating that there are big differences between the interest rates of housing loans between banks, Credit Product Manager Ersin Yaşar said, "State banks such as Ziraat Bank, Halkbank and Vakıfbank are the banks that offer the most suitable housing loans with a 0.99% mortgage interest rate. However, state banks are more selective than private banks in providing housing loans. Even a small drop in credit rating can prevent you from obtaining housing loans from state banks. On the other hand, private banks can be more flexible in these areas and reduce interest rates in order to remain competitive. Currently, the market average for housing loans is 1.41%. The issue that needs to be considered here is a cost difference of TL 35 thousand between banks that offer an interest rate of 0.99% and 1.41% for a housing loan of TL 100,000 with a maturity of 10 years. Thanks to the free credit price alarm we have developed as you can be aware of the most appropriate interest rates”.

Watch out for additional charges when comparing loan interest rates!

Ersin Yaşar said that the most important detail in the housing loans is the additional expenses. “Banks can insist on offering special products such as BES and credit cards as well as expenses such as life insurance and personal accident insurance provided in addition to the housing loan. Especially when the life insurance amount changes according to the person, it can be an important cost item when comparing housing loans. People who will use housing loans must calculate all the costs and compare the total cost”.

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