Turkey’s banks cut mortgage rates

Two of Turkey’s largest stateowned banks lowered their mortgage rates on Thursday, a day after President Tayyip Erdogan met with heads of local banks and urged them to boost lending to real estate, one of the pillars of Turkish economic growth.

Erdogan, a self-described “enemy of interest rates”, has repeatedly called for lower borrowing costs to fuel credit growth and economic expansion. In 15 years of rule he has transformed Turkey by building new roads, hospitals, bridges and ports. But investors now fear the economy is overheating. Erdogan addressed the sell-off in the lira at an unscheduled meeting on Wednesday with members of his economic team, the central bank governor and the heads of some of the major banks, including top state lender Ziraat and smaller rival Halkbank.

“Banks are advised to make borrowing easier to the real estate sector,” the presidency said in a summary of the meeting.

Ziraat, Turkey’s biggest bank by assets, said it was lowering the monthly interest rate to 0.98 percent on mortgages up to 500,000 lira ($117,000) with a maximum maturity of 10 years. The changes will go into effect on Friday, and compare to a current rate of 1.23 percent, according to its website.

Halkbank, the fifth-largest lender by assets, also lowered the rate on similar housing loans to a monthly 0.98 percent, it said in a statement. (RTRS)