So you’ve found your dream home or project, but in order to make it a reality, you need finance. Now you of course wonder, what options are available for you as a foreigner to get a loan to buy real estate in Thailand?
As in Western countries, almost all financial institutes in Thailand offer local Thais loans for real estate purchases. However, thanks mainly to the government’s wish to increase tourism, thereby encouraging economic growth, there are more opportunities for foreigners to procure loans. It should be noted that there are strict terms to be met in order to receive financing, which does limit a foreigner’s access, but this is nonetheless a positive shift in policy. Don't forget to check out our sizeable database of Phuket properties for sale.
There are two options available to foreigners:
There are several banks in Thailand and they all offer a range of financial services to Thai people from credit cards to business loans. Individual institutions have their own policies on lending to foreigners, but you need to meet certain criteria.
What are these criteria?
Proof of a stable and secure job.
Sustainability of payments
Amortization – is the repayment of the loan principal overtime.
The loan is amortized (repaid) according to an amortization (repayment) schedule, typically through equal payments. Each payment to the lender will consist of a portion of interest and a portion of principal.
Therefore the loan repayments must be spread out over more than 7 years.
Do I need to submit any other documents?
You may be required to submit the following as part of your application:
REMEMBER this list is not exhaustive and as mentioned above, every bank has an individual policy.
Can you give me some examples of other requirements?
This is dependent on specific bank offers at the time and is typically offered on fixed-rate terms. If you want to be sure of the best rate then you will need to complete a comparison of individual bank rates. They are competitive so it’s worth doing.
What other factors are involved in granting a loan amount for the property?
Banks generally have their own valuation process from which they ascertain a fair market value for the property.
This scheme allows foreigners to buy property in Thailand even if they don’t live there. Initially introduced in 2005 by the Singapore branch of Bangkok Bank, it can offer up to 70% finance to foreigners wishing to purchase property in Thailand. With more and more foreigners looking to have a dream holiday or eventual retirement home in Thailand, the demand for this is rising and therefore the Singapore branch continues to offer this service.
What currencies can I be paid in?
They can offer loans in numerous currencies
Is there a charge for this service?
There is an administration fee for this service.
How do I apply?
Here’s the catch, as they insist on meeting applicants in person, so will have to visit Singapore if you wish to apply.
Are there any alternatives to Bangkok Bank?
No doubt having realized the demand, the United Overseas Bank (UOB) now also offers a similar service. They don’t have as much experience under their belt as Bangkok Bank, but it does give foreigners a choice. More than just choice, business competition means competitive deals for customers.
What is the difference?
This is exactly where competitive deals can sway you as the customer depending on your needs.
The choice, as always is yours and will depend on what you are comfortable with.
A final note on mortgage criteria and protection under Thai law.
What legislation covers this?
What rules do I have to adhere to in order to qualify for protection under Thai Law?