Eurohypo: Fixed interest key to Turkish mortgage success
Fixed interest rates are essential for making Turkey's new mortgage system attractive to consumers, an industry expert has said.
Bernd Knobloch, chief executive officer of specialist real estate bank Eurohypo told Referans that homeowners will want to know exactly what they will be paying back on longer term property loans.
"Not just to know the amount homeowners are paying now, but to know what they will pay four years from now is important for them," he said.
Mr Knobloch's solution to this problem fixed interest rates that will protect consumers from any market fluctuations. Even though this may cause problems for Turkish banks, he asserted it was necessary for the success of mortgages in the country.
Although some have claimed interest rates are currently too high to make mortgages an attractive option, Mr Knobloch dismissed suggestions the timing of the law was wrong.
"If you do not start with regulations and you bring the mortgage system in just because the economy is on the right track, you cannot achieve it," he added.
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