Is it possible to get a mortgage in Thailand for foreigner

Many people are considering to purchase a property abroad, particularly in Thailand. But not everyone has enough budget to make a full payment. So the question is if it’s possible to have a loan in Thai bank for a property purchase.

Mortgage for foreigners exists in Thailand for a long time already but to gain it you need to comply with certain criteria of legislative and banking systems. Briefly, mortgage can be issued only for officially working people or foreigners who have business in Thailand. 

Mortgages are not issued for tourists. 

Foreigners who are going to invest in a property can pay by installments, the option that is normally offered by developers, or discuss the payment conditions with an owner. 

 

Installment payment offered by a developer

строительство на Пхукете

Commonly if you cannot make a full advanced payment for an apartment or a villa, developers offer payment by installments. Terms and conditions depend on a developer company and also on the construction stage. For some projects that are only at the stage of getting construction permits and clearing of construction site the terms of installment payment can vary from 1 to 3 years. 

For example:

  • Payment for an apartment reservation – 3,000 – 5,000 USD
  • The first payment within 1 month after reservation – 20-30% of an apartment cost
  • Payments at the stage of foundation construction completion, finishing and furnishing of an apartment – usually 20% at each stage
  • Final payment at registration of ownership – 5-10%

 

For completed projects the terms of payment can vary from 6 months to 1 year. 

There is a possibility of individual payment schedule depending on a seller. 

The amount of first payment also varies depending on a developer. For example, in development companies that can complete the project on raised investments the first payment will be lower, from 20% to 35%. The rest payments can be divided and marked in your individual payment schedule or you can make an agreement with a developer about making the last payment closer to construction completion or commissioning. Developers often offer good conditions to buyers who make a full advanced payment – guaranteed income (7-10% of apartment cost) already during construction.

For the projects that are only raising investments for construction the first payment will be higher, from 35% to 50%. Further payments will be made at construction stages – construction start, foundation completion, etc.

Sometimes developers offer the following option: if you make a 80-90% payment, the rest payment can be made by means of renting out an apartment. If you are buying an apartment in a completed building or in a project under construction from an owner who is reselling the property, you can discuss different possible options of payment. 

Below you will find information on how the foreigners who work or have business in Thailand can get a loan to buy property on. 

Banks and interest rates

The banks that issue mortgage for foreigners – Bangkok Bank, Bank of Ayudhya, HSBC, Kasikorn Bank, Siam Commercial Bank, Thai Military Bank.

Mortgage can be issued for the following property types: house, villa, apartment, commercial property. 

Mortgage conditions:

  • Interest rates are different in different banks and vary from 6% to 10% per annum.
  • Crediting period doesn’t exceed 10 years.
  • First installment for apartments – 40%, for villas – 30%.
  • By the moment of the discharge of debt a borrower age cannot exceed 60 years. 
  • Monthly payments. 

 

Documentation and requirements for borrowers

For those who work in Thailand:

  1. Passport
  2. Work permit
  3. Local bank statement of account over the past 6 months or 1 year (depends on a bank)
  4. Term of employment at a current place of work must be minimum 2 years

 

For those who have business in Thailand:

  1. Passport
  2. Work permit
  3. Local bank statement of account over the past 6 months or 1 year (depends on a bank)
  4. Foreign director personal account statement from the Thai bank over the past 6 months
  5. Company operating account statement over the past 6 months
  6. Copy of Thai director ID card
  7. Company foundation documentation
  8. Audit report over the last year (the official duration of a company must exceed 2 years)

 

Unlike mortgage, payment by installments to a developer is free of interest and there is no need to prepare much documentation. But there is a time limit (construction period) and payments to a developer will be higher than mortgage payments.

If you are interested in buying property in Phuket, contact our team, they will be glad to answer your questions, will help to choose a better project and advise on payment conditions. 

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