Can I get a loan secured by another property?

Can You Get a Loan Secured by Another Property in Turkey: Quick Answer

Yes, Turkish banks accept as collateral not only the property being purchased but also property already owned by the borrower. This opens up a number of additional opportunities for foreign buyers: from increasing the loan amount up to 100% of the new property's value to obtaining cash secured by an existing apartment or villa.

The mechanism works in two main formats:

• Cross-collateral — when existing property is given to the bank as additional security for a loan to purchase a new property. This can significantly increase the approved amount and reduce the down payment.
• Refinancing or cash-out — when you obtain a loan directly secured by property you already own, and you can use the funds as you wish: for renovations, purchasing another home, or personal needs.

How a loan secured by another property works

In the standard Turkish mortgage scheme, the bank finances 50% to 70% of the appraised value of the property being purchased, and the buyer pays the rest from their own funds. However, if the borrower already owns property in the Republic of Turkey, they can pledge it to the bank—and then the financing amount can reach 100% of the appraised value of the new property. This scheme is known in the market as “TeleMortgage” and is actively used, for example, through Antalya Homes partnership programs.

It is important to understand: the appraised value is determined by an independent licensed appraiser accredited by the bank, and it does not always coincide with the market price. The difference typically does not exceed 5–10%, but it must be factored into the financial plan in advance.

Terms of lending secured by property in Turkey

Terms vary from bank to bank, but the general benchmarks for 2025–2026 are as follows:

• Interest rate: from 2.99% to 8.5% per annum in foreign currency (US dollar, euro). Loans in Turkish lira have significantly higher rates and are rarely considered by foreigners.
• Down payment: from 0% to 50% — depending on the availability of additional collateral. Without another property as collateral, the down payment is usually 30–50%.
• Loan amount: from $50,000 to $1,000,000 and above. The upper limit is determined by the bank on a case-by-case basis.
• Loan term: from 3 months to 20 years (240 months).
• One-time bank commission: from 0.5% to 2% of the loan amount.
• Additional costs: property insurance (approximately 2–3 thousand lira per year), appraisal fees, notary charges.

Restrictions and nuances to be aware of

Lending secured by another property in Turkey has a number of specific features that a foreign borrower should consider in advance:

1. The property must be completed. Banks do not finance off-plan properties. Only properties with a ready TAPU (title deed) are accepted—both new builds from developers and secondary housing.
2. Restriction for owners of Turkish property. According to some banks, if the borrower or family members already own property in Turkey, the maximum loan amount for a new property may be limited to 25% of its appraised value. This restriction does not apply if the existing property is pledged as collateral.
3. Currency tie. Foreigners are primarily granted loans in dollars or euros—provided the borrower receives income in a foreign currency. This makes sense: the bank minimizes currency risks.
4. Encumbrance. For the duration of the loan, both properties (the collateral and the purchased one) will have a mortgage note in the TAPU. It is impossible to sell or re-register the collateral property without the bank's consent.
5. Liquidity assessment. The bank evaluates not only the value but also the liquidity of the collateral property. An apartment in the center of Istanbul or Alanya will be accepted more readily than a villa in a remote village.

Which banks work with foreigners

Not all Turkish banks lend to non-residents, but there is a choice. The most active with foreign borrowers are:

• Türkiye Finans Katılım Bankası — offers a special Mortgage Finance for Foreigners program with flexible terms and the possibility of remote application.
• Al Baraka Türk — an Islamic bank operating on the principle of “profit sharing” (murabaha), which excludes conventional interest; popular among borrowers from CIS countries and the Middle East.
• Kuveyt Türk — another large Islamic bank with programs for non-residents.
• DenizBank — works with foreigners if they have a stable confirmed income.

Each bank sets its own requirements for the borrower and the collateral property, so it makes sense to apply to 2–3 banks in parallel and compare the approved terms.

Documents for obtaining a loan secured by property

The document package for a foreigner includes:

• Foreign passport with valid expiration date.
• Turkish tax number (Vergi Numarası) — obtained at the tax office in 15 minutes.
• Income certificate from the employer indicating position, date of employment, and net monthly income.
• Bank statement for the last 3–6 months.
• TAPU for the collateral property (if already owned).
• Sales contract for the property to be acquired.
• Independent appraisal report of both properties.

If the borrower is married, the bank may additionally request a notarized consent of the spouse to pledge the property.

Step-by-step procedure

1. Property selection and preliminary consultation with the bank. At this stage, you choose a property, receive indicative loan terms from the bank, and understand the shortfall amount.
2. Appraisal of both properties. An independent appraiser determines the market value of the property being purchased and the collateral. Reports are submitted to the bank.
3. Application submission and credit committee. The bank reviews the document package, checks creditworthiness, and makes a decision. The timeframe is 3 to 10 business days.
4. Signing the loan agreement and mortgage encumbrance. In the presence of a bank officer and the seller, you sign the agreement, after which the TAPU is registered in the Cadastral Office with a mortgage note.
5. Transfer of funds. The bank transfers the approved amount directly to the seller. From this moment, the loan repayment schedule begins.

Notably, some banks allow loan processing by power of attorney — this eliminates the need to be personally present in Turkey at all stages. This service is especially in demand among investors who purchase property remotely.

Pros and risks of a loan secured by another property

Advantages

• Possibility to purchase property with virtually no down payment — thanks to cross-collateral.
• Loan in dollars or euros at rates significantly lower than in Turkish lira.
• Flexible terms — up to 20 years, allowing a comfortable monthly payment to be chosen.
• Possibility of remote processing.

Risks

• In case of loan default, the bank has the right to foreclose on both properties — the collateral and the purchased one.
• Restriction of freedom to dispose of the collateral property for the entire loan term.
• Currency exchange rate fluctuations: when taking out a loan in dollars and receiving income in another currency, debt burden may increase.
• Additional costs: insurance, appraisal, commissions — in total may amount to 3–5% of the loan amount.

Alternatives: what else to consider

If the scheme with a collateral of another property seems too risky, there are alternative ways to finance a home purchase in Turkey:

• Installment plan from the developer (taksit). Many developers offer interest-free installments for 6–24 months with a down payment of 30–50%. This is simpler, faster, and does not require bank scoring.
• Loan in the country of residence. Some foreign buyers prefer to take out a loan secured by property in their home country and use the funds to fully pay for the Turkish property—this avoids Turkish banking bureaucracy and often proves more advantageous in terms of rate.
• Refinancing Turkish property. If the property has already been purchased with cash, you can later take out a loan secured by it and put part of the invested funds back into circulation.

Conclusion

Getting a loan secured by another property in Turkey is quite feasible. This scheme is actively used by both foreign investors and locals. It allows flexible capital management: purchasing additional properties without withdrawing money from circulation, or obtaining financing against an existing asset.

However, this approach requires careful planning. Before pledging property to a Turkish bank, it makes sense to calculate all scenarios, compare offers from several banks, and be sure to consult an independent lawyer specializing in Turkish law. A well-structured deal can not only save tens of thousands of dollars but also become the basis for building a long-term investment portfolio in Turkey's growing market.