Mortgages in foreign currency

As per Article 851/I of the Turkish Civil Code, as a general principle, a mortgage is created for a specific amount of debt denominated in Turkish lira. The exception for this rule is regulated by Article 851/II. In accordance with thereof, solely for the purposes of securing loans denominated in foreign currency or indexed to foreign currency that are given by credit institutions, the amount of the mortgage may also be denominated in foreign currency. Thus, credit institutions may be granted a collateral in the currency of the loan. This option is important considering the possibility of depreciation in the currency of the country. However, mortgages in foreign currencies have certain drawbacks with respect to fixed ranks system and the principle of certainty. Our study examines the conditions sought in Article 851/II of the Turkish Civil Code for the creation of mortgages in foreign currency as well as other aspects of such mortgages with respect to the fixed ranks system and the principle of certainty.