Cost of housing creditits increases substantially

ISTANBUL - Anatolia News Agency

Interest rates on housing loans rose substantially from January to December last year, leading to an extra cost of about 17,460 Turkish Liras in a 60-month repayment plan per 100,000 liras of loan, according to data gathered by Anatolia news agency.

The extra cost of loans in December 2011 in contrast to last January rose to 40,320 liras in a 120-month repayment schedule.

The monthly average interest rate for housing loans, which was at 0.78 percent in January 2011, hiked up to 1.27 percent in December. The difference in the interest rates led to 291 liras more in monthly costs for a repayment schedule on 100,000 liras over 60 months. The figure rose to 336 liras in 120-month repayment plans.

Global effect

Interest rates jumped due to developments in the global economic environment, said İsmet Erdem, director of finance at Yapı Kredi bank. Uncertainty in the local markets has led to a liquidity crunch and lack of funding, said Erdem, adding that the rising trend in housing loan interest rates will continue going forward.

The increasing cost is diminishing the housing loan demand, Erdem said. Home prices and future expectations also play in customers’ loan demand, said Erdem. “In this period unfavorable global economic conditions caused customers to delay their housing demands.”