Home loan interest rates have reached the lowest level in 18 months. Monthly rates dropped below 3%. Despite the decrease, experts mentioned that the rates are still above the ideal level.

The average interest rate applied on home loans opened by banks decreased to its lowest level in 18 months, reaching 39.25% in the week of March 21st. As the outcomes of the disinflation program implemented by the economic management for the past 1.5 years reflect on the data, the inflation rate, which rose to 71.6% in June 2024, dropped to 39.05% in February. Following this decline, the Central Bank of the Republic of Turkey (CBRT), in the latest Monetary Policy Committee (MPC) meeting, reduced the policy interest rate, the one-week repo auction rate, by 250 basis points to 42.50%. Thus, there has been a total of 500 basis points reduction in the past two meetings. The cuts made by the CBRT were also reflected in the interest rates of home loans offered by banks.

PEAK ON APRIL 5TH
According to the data of the Central Bank, the average interest rate applied on home loans opened by banks decreased to 39.25% in the week of March 21st, marking the lowest level in 18 months. The previous low was at 38.85% on September 8, 2023. The highest rate was 45.14% in the week of April 5, 2024.

MONTHLY INTEREST BELOW 3%
A few months ago, the lowest home loan interest rate in banks was 3.05%, which lowered to 2.59%. Therefore, the monthly payment for a 10-year loan of 1 million liras decreased from 31,352 liras to 27,163 liras. The total amount paid decreased by 502,000 liras to 3,260,000 liras.

LOAN SALES 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 above the figures below 1%, considered ideal by industry representatives. Due to the high interest rates in recent times, the share of mortgage housing sales in total reached the lowest level since data disclosure began in 2013. While this figure had risen to 39.8% in previous years, dropping to 10.7% in 2024, it increased to 14.7% in the first two months of this year.