Drop in housing loan interest rates! How much are the installments for a 1 million TL repayment?

While there has been a limited decline in housing loan interest rates as of the new year, levels remain high. While some banks previously offered an interest rate of 3.05 percent, the lowest housing loan interest rate has now fallen to 2.74 percent.

Experts state that the Central Bank's meeting on March 6 will be critical for the future of interest rates. As markets expect a 250 basis point interest rate cut, this situation could directly affect housing loan interest rates as well.

HOW MUCH IS THE MONTHLY INSTALLMENT FOR 1 MILLION TL?

With the drop in interest rates, a significant difference has emerged in the monthly payments of a person taking out a 1 million TL housing loan.

In the previous period:

Interest rate: 3.05%

120-month term

Monthly installment: 31,352 TL

Total repayment: 3,762,260 TL

In the current situation (with a 2.74 percent interest rate):

Monthly installment: 28,512 TL

Total repayment: 3,421,494 TL

Accordingly, a person using a loan with the new interest rate will pay 2,840 TL less in installments each month and will have paid 340,766 TL less in total.

STATEMENT FROM REAL ESTATE EXPERT

Real Estate Expert Mustafa Hakan Özelmacıklı, in his statement to Milliyet, stated that the downward trend in housing loan interest rates continues and said the following:

“We can say that the markets are expecting a 250 basis point cut at the meeting the Central Bank will hold in the coming days.”

Özelmacıklı also stated that second-hand houses are more advantageous under current conditions:

“There are affordable second-hand real estate properties in many different provinces in our country. These properties can amortize themselves within 14-15 years. In the coming period, the second-hand market may become more attractive depending on housing needs.”

RECORD INCREASE IN HOUSING SALES

The downward trend in interest rates has also been reflected in housing sales. In January, 112,173 housing sales took place across Turkey. This figure points to a 39.7 percent increase compared to the same period last year.

According to the Central Bank's Housing Price Index data, prices have decreased by 7.2 percent in real terms over the last year. However, housing prices are trying to reach a certain level due to the effect of inflation.

Average square meter prices across Turkey are as follows:

Turkey average: 31,000 TL

Istanbul: 42,000 TL

Ankara: 24,000 TL

Izmir: 36,000 TL

RENT PRICES INCREASED FASTER THAN FOR-SALE PRICES

Rental housing prices also continue to rise rapidly. According to the latest data, there has been a 45 percent increase in rents on a square meter basis. This increase has surpassed the prices of houses for sale.

71 percent of the housing sales made in January consisted of second-hand houses. This shows that second-hand houses are in higher demand in the market.

COMPETITION HAS HEATED UP

Experts believe that banks will follow a more competitive strategy regarding housing loan interest rates in the coming period. Özelmacıklı noted the following:

"I evaluate that banks will proceed under slightly more competitive conditions for housing loans in the coming period. Banks are already minimizing their risks on the real estate side when price increases occur. I evaluate that exits from deposit interest will increase after March, and this will provide an advantage to the stock market and real estate markets. This situation may relatively move real estate prices upwards."

WILL INTEREST RATES FALL FURTHER?

Interest rates are not expected to show very large drops in the coming period. However, it is estimated that housing loan interest rates could fall below 2 percent in early 2025. The real estate expert said, "Frankly, we do not expect it. This will move in a limited way. We will be able to see housing loan interest rates below 2 percent in January-February of next year. Perhaps it could approach the 1 percent level in the second quarter of 2026. There will not be a situation where the current 2.74 percent interest rate falls to 1.80 percent within 3-5 months," he said.