Housing loan interest rates hit lowest level in 30 months

With only days left until the end of 2025, the loose monetary policy implemented by the Central Bank has created a distinct shift in the credit market. While the decline in housing loan interest rates has boosted both new loan applications and the credit volume in the sector, a significant shrinkage has been observed in vehicle loans, despite record-breaking sales in the automotive sector.

According to Central Bank data, housing loan interest rates have fallen to 37.21 percent, reaching their lowest level in 30 months. In some banks, monthly interest rates have been pulled down to 2.49 percent, which corresponds to an annual compound rate of 34.33 percent. The consecutive policy rate cuts since October have had a major impact on this decline, and those looking to become homeowners for the first time have been particularly able to take advantage of these favorable rates.

Reports from the Banking Regulation and Supervision Agency (BDDK) show a steady increase in the housing loan balance in 2025. The total housing loan volume grew by 32.1 percent compared to last year, reaching 669.3 billion TL.

Looking at the distribution of segments, public deposit banks reached 279.9 billion TL, showing a growth of 15.48 percent, while foreign deposit banks saw a level of 105.5 billion TL with a 52.8 percent increase. Domestic private banks rose to 217.9 billion TL with a 48.4 percent increase, while participation banks also exceeded 66 billion TL with a 36.3 percent growth.

Data from the Turkish Statistical Institute reveals that while there was a slight annual decline with 141 thousand housing sales in November, monthly averages for 2025 have remained above last year's figures. In the first 11 months of the year, a total of 1 million 265 thousand 388 housing units were sold, with 407 thousand 832 being first-hand and the remaining 857 thousand 556 being second-hand homes. The fact that sales made with loans rose to 135 thousand 209 units indicates that demand has begun to increase alongside the interest rate cuts. Experts state that if further cuts to the policy rate occur, demand will increase even more.

In the automotive market, however, the picture diverges from the housing sector. Despite the record sales of 132 thousand 984 vehicles reached in November, data released by the BDDK indicates that the vehicle loan balance has decreased by 33 percent compared to the previous year, falling to 50 billion TL. The total volume in public banks, which fell to 7.3 billion TL with a 63.55 percent decrease in vehicle loans, was 14.6 billion TL in foreign banks with a 7.33 percent drop, and 17.8 billion TL in domestic private banks with a 21.41 percent decline. Participation banks experienced a 36.12 percent contraction, with the total balance reaching 9.55 billion TL.

While interest rates for vehicle loans peaked at 48.66 percent at the beginning of the year, the lowest rate was recorded at 32.69 percent at the end of October. This divergence between housing loans and vehicle loans in 2025 points to a shift in the balance of the credit market. Future decisions by the Monetary Policy Committee are expected to contribute to further reductions in interest rates, particularly for housing loans.

News Source: 12punto