Attention those thinking of buying a house or car! Will interest rates on housing and vehicle loans fall after the Central Bank's interest rate decision?

The Monetary Policy Committee (MPC) of the Central Bank of the Republic of Turkey (TCMB) exceeded expectations in its final interest rate decision of the year. Implementing a 250 basis point cut, the MPC lowered the policy rate from 50 percent to 47.5 percent. This marks the first interest rate cut in 22 months.

Following the Central Bank's reduction of the policy rate, the question of whether interest rates on commercial, auto, and housing loans will fall has become a subject of curiosity.

Speaking to Milliyet on the subject, economist Muhammet Bayram stated that with the 250 basis point interest rate cut, the Central Bank has implemented an overnight interest rate corridor. This corridor means that the policy rate can be increased to 49 percent or decreased to 46 percent when necessary. Bayram said, "This regulation shows that a flexible interest rate policy will be implemented in an inflationary environment."

WILL INTEREST RATES ON AUTO AND HOUSING LOANS FALL?

Interest rate cuts are expected to have a positive impact, particularly on commercial loans. Bayram stated, "The real sector will be given breathing room with significant interest rate cuts in commercial loans. However, it is not realistic to expect major cuts in personal, auto, and housing loans," he said.

Bayram noted that those considering taking out a personal loan could evaluate current interest rates and potentially restructure their loans in the future. However, he expressed that interest rates on auto and housing loans will remain high for a long time and that monthly payments on these loans will continue at current levels.

ATTENTION THOSE THINKING OF BUYING A HOUSE OR CAR

Economist Bayram stated that interest rates could fall further in the coming periods, adding that if there is no urgent need, it might be more advantageous to wait before buying a house or vehicle. Bayram said, "Do not rush; it is logical to wait for interest rates to fall a bit more."

WILL INTEREST RATE CUTS CONTINUE?

It is projected that the Central Bank will reduce the number of meetings from 12 to 8 in 2025 and implement major interest rate cuts at specific times. Bayram assessed, "We may see a new interest rate cut in March as inflation falls below 40 percent."

ECONOMIC EXPECTATIONS

It is estimated that interest rate policies for 2025 will be shaped in parallel with inflation. While year-end inflation is expected to be around 45 percent, it is projected that the Central Bank will not make any changes to the policy rate in January, but will implement a new cut in February or March.