10 years of due date for home loan takers

10 years of due date for home loan takers

ISTANBUL - Hürriyet Daily News
10 years of due date for home loan takers

Minister Erdoğan Bayraktar. DHA photo

The owners of houses at risk of disaster that may be destroyed as part of the government’s urban transformation plans, will be granted loans with up to 120 months of due, according to a draft regulation submitted by the Ministry of the Environment and Urban Planning.

The ministry will provide loan opportunities for some 6.5 million house owners to help them pay the difference in the value of their existing house and the new house to be built, as part of the draft. If the value of the new house is lower than the old one, then the ministry will pay the difference to the house owner. Also, house owners who opt for bank loans will receive a support from the ministry. The draft regulation has been submitted to the Ministry of Finance.

The loan period and interest rates will be based on the size of houses, Environment and Urban Planning Minister Erdoğan Bayraktar said.

The loan period for houses smaller than 100 meters-square will be 120 months, or 10 years. For houses between 101 and 150 meters-square the loan period will be 84 months, and for those larger than 150 meters-square it will be 60 months.

The payback will start after the new buildings are completed or in two years time. Interest rates will be the average of the consumer and producer inflation of a given period. However, the ministry will increase the interest rate of loans for houses between 101 and 150 square-meters by 10 percent, and for houses larger than 150 square-meters by 20 percent, while the interest rate
will be fixed on loans for houses smaller than 100 square-meters.

Close watch

Bayraktar told Anatolia news agency that the ministry would inspect whether these loans were being used properly.

“The loans will not be used for the wrong purposes,” he said, adding that the loans would be canceled if there was any evidence of wrongdoing.

The new houses or workplaces will also be insured. The insurance contracts, which will be tax-free, will be renewed every year until all the debt is paid back. During the loan payback period debtors will have life insurance.

The ministry will provide loans for those who want to construct their own buildings on the condition that the rights holders have resided for at least one year in the destroyed buildings.