Despite recent turmoil in financial markets, and trouble for the UK’s fifth largest mortgage provider Northern Rock, there is no shortage of companies offering mortgage quotes. One of the questions you will often be asked when you’re at the cashiers in the bank is whether you’ve got a mortgage, followed by when your mortgage is up for renewal and if you would be interested in a quote for a mortgage. There are over 8,000 mortgage products in the market, so you’ll never be left wanting for mortgage quotes.

Companies claim to and try to make the mortgage and re-mortgage process as easy as possible. Mortgage advisors can compare more than 8500 mortgage products from ALL UK lenders to provide you with mortgage quotes. If you go online you will very quickly be able to request a free, no obligation, quote, either by choosing a mortgage from a selection of market leading mortgages, by completing a form or by calling a ‘hotline’ number.

Mortgage advisors are able to search the whole of the UK mortgage market to find a mortgage which will suit your needs, all without obligation. Doing this yourself would be time-consuming almost to the point of impossibility, and approaching easy-to-reach high street lenders is not always the route to the best route available. Getting a number of mortgage quotes will enable you to choose the best rate for you. Using forms on some website will give you access to several mortgage quotes instantly and for the completion of only one form – a great time saver that will enable you spend time comparing the different mortgage quotes, rather than spending time and effort on actually obtaining a number of mortgage quotes.

Things to look for when receiving mortgage quotes go beyond the headline interest rate. While you are obviously keen to get as low an interest rate as possible, you need to look for the fees that come attached. These usually include a mortgage arrangement fee (which can be as high as nearly £2,000), how long your low deal lasts, what are the exit penalties if you wish you pay off all or part of your mortgage before the end of the term, is there any commission attached that will go to the broker; what other fees are there? All these may make a low interest rate deal actually cost more in the long run.

When looking for mortgage quotes you will often see best mortgage tables. These are free to use and easily accessible, but may not be quite what they seem because different tables use different criteria to order the mortgages.

So, although you can compare the mortgage deals of the UK’s top mortgage lenders in minutes, you may still be confused. It is better to get a number of mortgage quotes for your personal circumstances. To do this it is probably best to consult a mortgage broker or mortgage advisor who will talk to you about your own financial situation, your requirements, both long and short term, and come up with a number of sensible mortgage quotes just for you.

Size of the Turkish Mortgage Market

The Turkish mortgage market has shown promising growth in the last few years. While the existing mortgage loans had a share of only 0.6 percent of the GDP in 2004, the share jumped to 2.6 percent in 2005, and then to 4 percent in 2006. Currently the existing mortgage loans are about 31 billion YTL, which is about 5 percent of GDP.

These statistics clearly show that mortgage market has been growing faster than the rest of the economy. As described below we expect that it will likely to continue this trend in the near future too. The rapid growth has been fueled by primarily by economic factors such as falling interest rates and improving economic stability but also by characteristic factors for Turkey such as solid population growth and strong ownership culture.

For 2008 we anticipate that the fast growth in the mortgage market will continue amid the continued decrease in the interest rates. Assuming that inflation will move towards targeted 4 percent and Turkey’s macroeconomic indicators will not get weaker in 2008, we expect that the interest rates will continue to fall in 2008. In addition, when the secondary mortgage market starts, capital markets will start to share the risk of mortgages and the cost of getting a mortgage loan will likely decrease further.

Based on these conjectures, we anticipate that the annualized growth in the mortgage market in the beginning of 2008 will average about 40 percent and then will accelerate to about 50 percent as long run interest rates decrease to 1 percent in the second half of 2008. Based on these predictions, we find that by the end of 2008, the mortgage loans will be about 47 billion YTL, making about 6.5 percent of the GDP then.

Looking even further, based on the assumption of continued decrease in the interest rates, and recently announced plan of inflation falling to 4 percent as planned in 2008, 2009, and 2010, our models predict that by end of 2012 the mortgage loans can be as large as 15 to 18 percent of the GDP.

Let’s also note that we believe that there two major risks to our forecasts for 2008: The first is a turmoil in the global economy and especially world’s financial markets driven by a recession in the USA. The second one is a domestic financial crisis probably caused by a current account imbalance. In either case, it would be very hard to predict the growth of the mortgage market for 2008.

Predictions on the Structure of the Mortgage Market

We believe that in 2008, the Turkish mortgage market structure will start to see several important changes:

1) Increase in refinance activity: Currently the majority of the new mortgage agreements are issuances of new mortgages and refinancing of mortgages does not take a large share in the market, however, we believe that starting in 2008, the refinancing will start to take a significant share in the market amid the decreasing interest rates. If the interest rates continue to decrease, the share of refinance activity can be even more than half of the total mortgage applications in a very short time.

2) Variable rate mortgages: Currently 99.9 percent of all mortgages are fixed rate mortgages. This is not surprising as variable rate instruments are very new in Turkey and the risk and benefits of these new instruments are not very understood yet. In addition, the very large movements in the interest rates and exchange rates in early 2000s and accompanying bankruptcies are still fresh in the memories of Turkish people and created a crisis-awaiting culture. However, we believe that the advantages of the variable rate mortgages will start to draw more people and its share will start to increase slowly in 2008. But for this, banks should reduce the interest rates of the variable rate mortgages, which did not happen so far because of the lack of competition in this type of products. We anticipate that as the competition among mortgage lenders increase, we will start to see more favorable variable rate mortgage instruments soon.

3) Lending institutions: Currently all mortgages are offered by banks; however, in 2008 consumer funding companies that are allowed to invest in capital markets to create funds for the home loans will start to offer mortgages. These new lenders will start to change the market structure as they may be less structured and flexible than the banks.

4) Secondary mortgage market: Secondary mortgage market is expected to start in 2008. We expect that at the beginning, the secondary market will be experimental without causing a significant immediate change in the interest rates, however, as the market matures, it will be one of the most important pillars of the mortgage market. It is hard to predict the role of the secondary market right now, but it is worth noting that secondary mortgage markets tend to play an important role in a few years after it started. For example, in the USA, mortgages trades in the secondary market started in 1970, and in 1972 it represented 4 percent of the total mortgage debt, the share increased to 9 percent in 1979, and then to 16 percent in 1982. In order to see comparable growth in the Turkish secondary mortgage market, corporations such as Freddie Mac should be founded, otherwise, the growth will be much slower.

The benefits of the securitization are reduced interest rates for the borrower, increase in the credit availability, liquidity increase for the lenders, and increased efficiency in the mortgage markets.

When mortgage markets merge with the capital markets through securitized mortgage loans, the market interest rates will quickly impact the mortgage interest rates.

Briefly, we expect that in 2008, growth of the mortgage market will continue its pace and in addition it will continue going through important structural changes that will cause even more growth in the coming years.