A Comparative Review of the Early Payment Results in Housing Loans

Abstract

The aim of the study is to reveal the function of the early payment option after the end of the downward trend in housing loans rates in Turkey. The compensation application limits the expected benefits, and this study wants to analyze and evaluate this situation comparatively on a real loan example. In this study, it compares with a real housing and consumer loan example and deals with this issue. The most rational way for customers is not to pay the housing loan early. Rational customers will prefer to direct their existing investable funds to time deposits with rising interest rates. This gives them the opportunity to get rid of some of their loan debt with the deposit interest income they will provide within the payment plan. This means that existing loans become more advantageous for customers. However, considering that this advantage will indirectly create a burden on the general economy, it is essential that the relevant market makers and oversight boards make the necessary regulations regarding this issue. Another important point is that the regulation to be made in this regard will theoretically increase the demand for the Turkish lira and will be supportive in terms of monetary and fiscal policy management.