North Cyprus is unique in many ways. It offers extremely low property prices outside the Eurozone in an exquisitely beautiful location and a great way of life for ex pats, whether wanting to relocate or take regular holidays in the sun. However, in terms of mortgage availability, one key difference between Northern Cyprus and a more established European holiday property destinations such as Spain or France is that to date overseas buyers have not been eligible for North Cyprus bank mortgages. The good news is that the TRNC ( Turkish Republic of North Cyprus ) property developers are increasingly filling the gap left by the banks with “in house developer loans” – and the even better news is that North Cyprus International (NCI) has recently arranged for its clients exclusive new low £10,000 deposit, low 2.65% fixed rate interest 5 year mortgages on selected apartments and villas throughout North Cyprus.
No “Boom and Bust” for property prices in North Cyprus
Whilst the lack of North Cypriot and Turkish bank mortgages in the past has been disappointing for prospective ex pat and overseas purchasers, it has actually prevented the “boom and bust” property price scenario recently seen in Eurozone locations such as Spain and the European South of Cyprus (where cash was easy to obtain from banks and where these loans artificially pushed up prices which have since collapsed). Cash property buyers have traditionally therefore been king in the TRNC – and there are over 300,000 foreign individuals living in Northern Cyprus, many of whom have bought with savings or re-mortgaged properties in other countries to raise the cash to buy. This has had the effect of keeping North Cyprus property prices generally more stable – with many prices even rising by up to 10% p.a. in key investment areas making a North Cyprus property a great investment. However, if you would like to buy a villa or apartment in North Cyprus but have been unable to do so yet due to lack of loans – read on for the good news!
North Cyprus developer mortgages & rental guarantees
A growing number of the North Cyprus International (NCI) approved property developers are now offering “in-house” developer mortgages and payment plans, increasingly with low deposits, with the norm generally being a minimum of 20-50% of the property price as deposit with the balance being required over 3-12 years. These loans are generally unsecured, non-status loans with no penalty for early settlement, with the buyer receiving the title deed once the loan is paid off and no credit checks involved. In addition, if you are an investor, a growing number of these developers are also offering guaranteed rental returns on certain Kyrenia and beachfront apartments up to 9% p.a. in the contract for those who invest in their properties. In this way, depending upon the level of deposit available, investors can even gain a “buy to let” property in North Cyprus, where healthy rental income in Kyrenia and also beachfront holiday areas such as the West and East Coasts will often meet a good proportion, although not generally 100%, of the monthly loan payments on such arrangements.
It must be noted that if you do NOT have a rental guarantee and are planning to take out a developer loan, you should budget for the monthly payments to be met your own usual income or pension, rather than by rental return. Our NCI advisors are well placed to advise on the likely rental income from any particular property and help you make the decision as to whether a particular property investment is affordable for you.
One apartment opportunity in the Famagusta region offers 7% guaranteed rental return for two years, in the contract, as well as low developer loans up to 5 years with monthly payments starting at £399 – and NCI can also offer a town centre investment package in Kyrenia with 9% guaranteed rental return and interest-free payments over 15 months. However, it should be noted that there are not generally developer mortgages or payment plans over the kinds of periods regularly seen in European countries such as the UK, where it is usual to borrow money over up to 25 years.
12 years is generally the longest period available, with one developer offering 12 year mortgages with deposits from only 25% on lovely key ready villa and apartments in a variety of locations. Another company offers 10 year loans on ready properties (including villas in Tatlisu from only £65,000) although it must be noted that the interest rates on these loans are quite high in keeping with the fact that rates are generally considerably higher in Turkey and Northern Cyprus than they are in other European countries such as the UK.
NEW – £10,000 low deposit, low interest North Cyprus NCI Mortgage Offers
Even with the developer loans, to purchase a 2 bedroom apartment of upwards of £50,000 (or a villa of over £100,000), it has generally been necessary to have at least £20,000 for the deposit for the apartment, (or at least £50,000 deposit on a villa) with 5 year interest rates usually up at around 8% and 8-10 year loans up to 10% or more. This month, North Cyprus International (NCI) is proud to announce an exclusive low deposit, low interest mortgage offer which it has negotiated on behalf of its clients. Two examples of this offer can be found HERE and HERE – prime beachfront apartments on the North East Coast can be reserved for only £10,000!
With a fixed rate of only 2.65% interest over 5 years and a deposit of only £10,000, NCI clients can now choose from a range of lovely key ready, sea-view and beachfront apartments on the North East and West Coasts from only £45,000 and monthly payments starting at £499. In addition, they can even benefit from the same low interest, low deposit mortgage on a unique parkland villa site in Bellapais, where the key ready villas at £125,000 can be reserved for only £40,000 deposit and the balance paid over the same 5 year period.
The future for bank mortgages in North Cyprus
It is hoped that non-Cypriot ex pats will eventually be offered mortgages by Turkish and North Cyprus banks. At present, Turkish Cypriots can gain mortgages from the banks, particularly on Pre 74 Title Deed properties, although some banks are now lending on TRNC title properties too. North Cyprus bank mortgages are usually for those Turkish Cypriots resident in North Cyprus, although it is worth non-resident returning Cypriots making enquiries. Ex pat residents of the TRNC with a long history of banking with a particular bank, and with a good level of savings may also be successful.
In the meantime, ex pat foreign individuals can take heart in the advent of the new low deposit, low interest developer mortgage offers. Home owners in their country of origin wishing to purchase a property in North Cyprus should also enquire to their own banks at home to see if they are eligible to re-mortgage an existing property to raise funds for the purchase. Our experienced NCI staff are here to advise you or organise your free inspection trip accommodation for a North Cyprus property viewing visit. We can be reached at any time on +44 207 112 8086 (UK) or +90 548 861 0600 (TRNC).