ANKARA (AA) – Turkey’s state-run Ziraat Bank has cut home loan rates following a Central Bank decision to trim the overnight lending rate to 8.75 percent, the bank said on Wednesday.
"Effective on 10 Aug. 2016, Ziraat Bank will reduce interest rates across a range of variable lending products for home owners," it said in a statement.
The announcement brings Ziraat Bank's all owner-occupier rate to below one percent per month.
Ziraat announced that mortgage interest rates for the maturity of 1-24 months would be 0.82 percent, 25-60 months down to 0.90 percent and 61-120 months to fall to 0.95 percent.
The bank's cut came after Turkey’s Central Bank cut the overnight lending rate, the highest of the multiple rates it uses to set policy, by 25 basis points to 8.75 percent in line with expectations on July 19.
Mortgage interest rates have recently been fluctuating between 1.10 - 1.30 percent per month.
The representatives of the real estate sector had criticized the high mortgage rate in Turkey, saying people should postpone any decision to buy property due to high interest rates.
President Recep Tayyip Erdogan had again urged lenders to reduce interest rates for home purchases to around nine percent, describing rates as “oppressive,” in a speech on Aug. 4.
Deputy Prime Minister Nurettin Canikli told a Turkish newspaper on Monday interest rates would be cut below 10 percent in line with Erdogan’s recommendation.
“We will cut the rates below 10 percent without creating pressure for the banking sector in line with President Erdogan’s recommendations,” he said in an interview with Hurriyet Daily News.
The head of Turkey’s Banking Regulation and Supervision Agency (BDDK), Mehmet Ali Akben, had told Anadolu Agency on Friday the watchdog expected a downward revision in consumer, corporate and housing loans in a meeting with lenders.
Canikli also said the rate cut by the Central Bank of 25 percentage points a couple of days after the failed coup actually showed high confidence in the Turkish economy.