Financing a Property in Thailand | Phuket Realtor
Financing a Property in Thailand
What you Need to Know
Foreign buyers trying to obtain a mortgage from a local bank in Thailand use to be impossible. Now it's getting easier. There is now a hand full of lenders and financial institutions in Thailand accepting applications to assist with mortgage loans to foreign ex-pats.
Not so long ago, foreigners looking for lending were facing major resistance in obtaining loans and bank financing to invest in property in Thailand. With Thailand's growing popularity as an international property market and destination, things are changing. The early entrants were Bangkok Bank and UOB initially providing a very limited range of mortgage products for foreigners.
Today, foreigners have access to a slightly larger selection of mortgages and a relatively wider choice of lenders. However, qualifications for these financial products still remain severely restricted. On top of this, loan conditions imposed are generally less favorable than local Banks back home.
If you look around the current financial situation prevailing across the globe, it's pretty good. Many buyers look to Banks in their own countries for financial backing or can explore a wide array of options now available to them. Preparation is the first step and shall help you in determining your current position and availability of foreign loan programs for investors considering property in Thailand.
Foreign buyers interested in seeking financing from these banks should be aware that both interest rates and loan-to-value (LTV) are significantly higher than current rates. Loan payback periods are usually shorter and deposits of up to 50% are required on some loans. For many foreign buyers, it becomes an uncompetitive proposition.
However, ex-pats looking to settle down in Thailand with a stable income may find that a mortgage through one of these international lenders is a convenient way to save on rent and own a home.
Mortgages without Working in Thailand
A question we get asked a lot from foreign buyers who do not plan on living permanently in Thailand is: "Can we get a mortgage from a Thai bank?"
It is possible to get access to financing without living and working in Thailand. However, eligibility and choices of lenders are limited. Most borrowers who qualify find better lending options elsewhere, such as in their own country. Many of these buyers find it more attractive to take out an equity loan on their property back home at better terms.
Unfortunately, banks and lending institutions feel a heightened risk to lend to foreigners who do not live and work in Thailand.
Banks and Lending Institutions
UNITED OVERSEAS BANK (UOB)
United Overseas Bank is one of the early entrants into the foreign lending market and initially set up to capitalize on the growing demand from Singaporean and Malaysian buyers who were investing in property in Thailand. The bank usually prioritizes buyers holding a current account.
UOB offers mortgages on property purchased in Singapore, Malaysia, Thailand, Japan, Australia, and the United Kingdom and has offices and mortgage teams in place in these countries to help assist clients.
HOW IT WORKS
UOB International loan information can be found here.
UOB loan calculator can be found here.
UOB referral program can be found here.
UOB contact center can be found here.
INDUSTRIAL AND COMMERCIAL BANK OF CHINA (ICBC)
The Industrial and Commercial Bank of China (ICBC) is relatively new at offering mortgages to foreign buyers. ICBC has recently started to offer mortgage products and services because of the increasing demand from Chinese buyers of property in Thailand. These Chinese buyers are coming from Hong Kong, Macau, Singapore, and mainland China.
Tel：0 2677 4415
Individual property owners are sometimes willing to extend terms to those looking to buy their property in Thailand. This can be requested in a formal offer to the seller with a payment plan spelled out. It helps to be as specific as possible in making the schedule of payments. Of course, in most instances the property will not be transferred until the last payment is made. In such a scenario, an agreement is worked out reflecting the terms of the sale in the contract.
Make sure that your realtor knows you are in need of financing terms before the purchase of property in Thailand. They will have suggestions of where to look and which sellers and developers offer payment terms.
As in Western countries, almost all Banks in Thailand offer mortgages to local Thais for real estate purchases. And more recently, thanks to the government’s wish to increase investment, there are more opportunities for foreigners to secure lending. It should be noted that there are strict terms to be met in order to receive financing from a Thai bank which has limits, but this is nonetheless a positive shift in policy.