Are you seeking a North Cyprus property with a bank mortgage, loan or developer payment plan?
North Cyprus International always tries to find the best possible mortgages, loans or developer installment/payment plans for our international and local buyers and have been specialists in this for many years.
If you are an overseas buyer and must have a payment plan, then you are best to go for a new-build developer loan property. We explain more about these below. These are usually sold “Off Plan” or under construction.
If you are an overseas buyer and wish a key ready, completed property however, then generally you will generally need to be a cash buyer. This is because the currently lengthy “permission to purchase” process for overseas buyers means that bank loans and mortgage funds take too long to be released and the seller will prefer to sell to a cash buyer. Quick cash sales for such properties are the name of the game in today’s fast-moving North Cyprus property market. North Cyprus bank interest rates are also very high compared to European rates, which makes bank loans unattractive to investors.
In this article we will go over the FAQs and loan options for overseas and Turkish Cypriot buyers.
Are there North Cyprus bank mortgages for overseas buyers?
The answer is Yes and No. North Cyprus 50% LTV Bank Mortgages have been gradually being introduced for overseas buyers pre-covid by selected North Cyprus banks and branches of Turkish banks in North Cyprus. However, North Cyprus bank mortgages are not currently a practical route for overseas buyers.
As a result of the current property boom in North Cyprus starting in 2022, it has become a sellers’ market. This means that any seller of a good quality resale apartment or villa knows that they will most likely get an offer from a cash buyer. Due to the time scale for banks to release the 50% funds to overseas buyers (which can take up to a year), sellers are understandably reluctant to accept offers from overseas buyers needing a bank mortgage.
Why does it take so long for North Cyprus banks to release mortgage funds to overseas buyers?
The process for purchasing a property in North Cyprus involves something called “application for permission to purchase”. This is generally a formality, but does take time and involves police checks in the passport country of the buyer. Waiting times vary, please check with your North Cyprus lawyer. However, at the time of writing it was taking up to a year. The title deed cannot be transferred as security to the bank until this permission is granted. That means that an overseas buyer borrowing money from a bank must persuade a seller to sell to them with a 50% deposit and wait up to a year for the balance of the funds. Currently sellers are not generally willing to wait for this.
Are there new build North Cyprus Property Developer Installment Plans?
Yes. North Cyprus property seekers requiring a new build property can take advantage of developer loans and installment plans. It’s standard to pay a first payment of around 25-30% of the sale price and then pay the balance either interest free over the build period (which can be anything from 1-3 years) OR with interest over an extended period. The longest periods currently available are around 10 years.
Every developer has a different plan, which is why North Cyprus International can’t outline a standard developer payment plan here. However, we are agents for all the major developers in the TRNC so please complete our PROPERTY QUESTIONNAIRE, saying clearly what your maximum available working capital is for your first payment, and we can advise which developer property would suit you best. We have established relationships with developers and can often negotiate discounts for our buyers, so you can sometimes get a cheaper price via us than going direct.
Can I buy a key ready North Cyprus home with a developer payment plan?
It is very rare to get a key ready property with an extended developer loan or installment plan. This is because 99% of all developer loans are on off plan or under construction properties. Most new build sites are selling out well before they are completed. So, if you are seeking a key ready, build home, you must go for a resale (for which you currently need to be a cash buyer). We realise that this means some people are currently excluded from the fast-moving North Cyprus property market.
Please also bear in mind that the sale price of developer new build properties can be up to double the cost of the same size older property. This is due to the huge increase in North Cyprus land value, materials and building costs over the last few years. It can be best to try to raise money in your home country, where interest rates are also lower, and become a cash buyer.
Are there private loans available for North Cyprus property purchase?
Yes. North Cyprus International (NCI) can introduce you to a loan company. Again, interest rates are high and loan period is short. The terms are currently 50% maximum LTV (loan to value), over a maximum of 5 years. Please check with us for current interest rates – again these are high and linked to Turkish rates. These loans are only available on properties with Individual deeds and there are arrangement fees of at least £2,000. Please note, the monthly payments are very high and cannot in any way be compared to a UK or European mortgage monthly payments, which are usually over at least 20 years.
Are there North Cyprus bank mortgages for Kimlik Card holders (Turkish Cypriot nationals)?
Yes, Kimlik holders can purchase very quickly as there is no “permission to purchase” process involved. Many North Cyprus banks and branches of Turkish banks in the TRNC will offer mortgages to Turkish Cypriots holding Kimlik cards and resident in the TRNC (subject to T and Cs). The property will need to have an individual deed (no shared deeds will be accepted). Please contact your local bank for details. The maximum LTV is usually 50% of the sale price, but this may vary.
What are the interest rates in North Cyprus for loans and bank mortgages?
Bank interest rates in North Cyprus are fluctuating but can get as high as 12%. They tend to follow the interest rates of Turkish banks. Please contact your local bank for updates.
These high rates are another reason why it’s not really practical for an overseas buyer to get a North Cyprus loan or bank mortgage. With rates being much lower in most visitors’ home countries, it’s far more practical for the overseas buyer to raise funds in their home country by remortgaging or finding an unsecured loan there.
Can I pay for a key ready property in installments with the seller?
Yes, occasionally we have been able to arrange very short-term payment plans between the buyer and the property seller for a small % of the sale price. These are usually only over a one-year period and therefore can’t be seen in any way as a mortgage. Your lawyer can advise if this is a good idea and obviously not all sellers will agree.
https://northcyprusinternational.com/property-match-questionnaire/If you wish to see which properties we advise as being suitable for your current cash flow, and you are planning to come soon, please complete our property questionnaire.