Can Foreigners Get Mortgages to Buy Property in Thailand?
Buying property in Thailand is extremely attractive for foreigners, both as an investment and as a residence. Nevertheless, purchasing real estate usually requires a substantial amount of capital. Even if for those who do have the funds available, it is often preferable to finance a condominium purchase, thereby maintaining liquidity.
However, while they may be able to access mortgages in their home countries, or as a foreigner in other countries, many foreigners believe that real estate financing in Thailand is not possible. In fact, depending on their status, certain foreigners can obtain loans for condominiums, depending on their expatriate status.
What are the financing options for foreigners buying condominiums in Thailand?
There are a few options for obtaining a mortgage for buying a property in Thailand. Please note that the options discussed in this article are those that may be available for individuals seeking to make a purchase.
Thai bank loans for long-term residents
Foreigners who are long term residents or who are legally married to Thai citizens may be able to access financing from Thai banks:
- Permanent residents (ใบต่างด้าว) in Thailand are eligible for loans from Thai banks usually under similar criteria as Thai citizens. These criteria are typically:
o They cannot be over 60 years old. Thai banks usually expect loans to individuals to be paid in full by the time they are 60 years old. That is because 60 is the retirement age, and banks do not expect pensioners to be able to make the same payment amounts as when they were employed.
o Good credit score with the Thailand National Credit Bureau. This is usually based on your credit card history in Thailand.
o Monthly income of at least three times expected monthly repayment.
o LTV of 70%. This means you can borrow up to 70% of the property’s value, as determined by the government, although recently the Bank of Thailand has allowed loans of up to 100% LTV.
- Expatriate employees, specifically long-term visa holders with work permits may also qualify for loans. This very much depends on the bank, and usually requires the foreigner to have held the visa and work permit for at least two years to prove a stable income and standing in Thailand.
- Foreigners legally married to a Thai citizen will not qualify for a mortgage. However, they may act as guarantors for their spouse’s loan, although this does not mean the foreigner is the property owner or is afforded many legal rights to the property.
Recently, financing companies, such as MBK Guarantee, have been offering condominium loans to foreigners. Typically, they offer loans for up to 50% of the property value with monthly installments and balloon payments using the underlying property as collateral. Also, there are calls for the Thai government to consider making property ownership easier for foreigners, which may include opening up financing options as well. It is best to discuss your options with a trusted real estate expert, such as Asher Property.
Foreign bank loans for Thai property purchases
If Thai banks are not an option, there are certain overseas banks that offer financing for real estate purchases in Thailand.
- UOB in Singapore offers mortgages to foreigners seeking to purchase property in other countries, including Thailand. Their criteria include:
o Only properties in Bangkok and certain other provinces
o For residence or investment purposes
o Freehold condominium purchases only
o LTV of up to 70%
o Loans in SGD or USD
o Tenor of up to 30 years
- ICBC in China is currently offering loans for local Chinese customers working in selected Chinese companies holding work permits in Thailand. These criteria include:
o Non – resident applicants
o Age between 21 – 55 years.
o Loan period not to exceed borrower’s 60th birthday
o Stable income and good credit
o Only for selected condominiums in Bangkok and certain provinces valued at least THB 2.5 million
o Loans in SGD
These are two examples of overseas banks with financing options available currently. Others may have lending programs available.
Rent to buy financing
For foreigners who cannot find a bank either in Thailand or overseas to finance their condominium purchase in Thailand, the property owner may be amicable to a private financing arrangement. Typically, this is in the form of rent to buy.
“Rent to buy” is very much like it sounds – the buyer pays for the property in installments in the form of rent. Sellers willing to agree to this will often expect a substantial down payment and for interest to be worked into the monthly payments. Since this is a private arrangement between buying and seller, they need to negotiate and sign a detailed contract.
The rent-to-buy contract would include the down payment required, what the total sum would be, how the total amount breaks down into monthly payments, any penalties and interest involved, and other details, including who is responsible for the property’s maintenance. Ultimately, the relationship with buyer and seller is more like landlord/tenant until the buyer completes all payments. Then the seller will transfer the deed to the buyer.
Let Asher Property assist you with your condominium purchase
Obtaining a mortgage in Thailand as a foreigner can be difficult, but with expert guidance, you can find the right location and financing. Asher Property understands the Thai real estate market and the various financing options available to foreigners. If you are seeking to buy a luxury condominium in Bangkok, contact us today to find out how Asher Property can help you find the perfect place for your ideal lifestyle in Bangkok.