Mortgage rates at the three large state banks (Ziraat, Halk, & Vakif) have been reasonably low considering the inflation and repo rate coupled with the currency issues. Clearly, the government has been trying to prop up the housing market with these rates at .99% (monthly basis), which are considerably lower than the private banks. With the current inflation rate around 16%, these mortgage rates look very attractive.
However, one has to calculate other expenses like earthquake, home, and life insurance (mandatory on a yearly basis); taxes for the deed and other transfer fees (one time), and the bank fees, which vary depending on the bank. Of course some banks will try to get you to combine the fees into the loan.
Consumer and automobile loans are considerably higher with rates starting at around 1.29% (monthly) plus others expenses and fees. Surprisingly, state banks have higher rates than the private banks in these categories. The usual charges associated with these types of loans are bank fees, life insurance and two types of taxes, KKDF and BSMV (Bank Insurance Transaction Tax and a Fund Tax). These two taxes are levied on your monthly interest at 20%; so if your interest is 100TL for that month then you will be charged 20TL totaling 120TL (Interest + tax).
All in all, mortgage rates at state banks are very attractive while the consumer loans rates are too high for a consumer in a sluggish economy. Clearly, a borrower needs to do his/her due diligence before walking into the bank, so they will not be shocked by the other costs. I am totally for lowering interest rates in Turkey as long as inflation is in check and everything else being equal.
