Looking to purchase your dream home in Thailand but need financing? As a foreigner, it can be challenging to obtain a bank loan for real estate purchases in Thailand.
Unlike Western countries, most financial institutions in Thailand don’t readily offer loans for real estate purchases to foreigners. While some banks claim to offer loans to non-Thai citizens, strict conditions must be met, which severely limits a foreigner’s access to loans.
One crucial requirement is that the property must be held in the foreigner’s name, limiting loans to condominiums, the only type of property that can be owned freehold by foreigners, and registered under the Condominium Act. Therefore, if you’re looking for a loan to purchase land or a house in Thailand, it’s not possible.
Although there have been positive policy changes in recent years that allow foreigners limited access to financing, we recommend contacting banks at the early stages of your property search if you don’t have cash funds, as acquiring a bank loan in Thailand as a foreigner can be a complicated process.
Our team at 999 Phuket Property, will created this article you to get all the infos, how to maybe get a loan of a Thai Bank, as a foreigner.
Financing Real Estate in Thailand: Options for Foreigners If you’re a foreigner seeking to purchase property in Thailand, there are two financing options available: local financial institutions (banks) and international home loan schemes.
Finance from Local Financial Institutions (Banks) Not all banks in Thailand offer loans to foreigners, but some do, including HSBC, Siam Commercial Bank, and Thai Military Bank. However, there are certain criteria that are pretty much universal for loan eligibility:
- Proof of a stable and secure job
- A work permit of at least 1 year or a Thai resident permit
- Proof of employment in Thailand, such as a letter from your employer that clearly states your length of service and annual income
- Payslips as further proof of income
- Banks may also request company documents from your employer to assess the sustainability of your employment.”
Ensuring Payment Sustainability
Before granting a loan, banks in Thailand conduct credit checks on the applicant and have certain criteria that need to be met. These include:
- The repayment period and the applicant’s current age cannot exceed 60 years when added together.
- The fixed income should be at least three times the monthly repayment amount.
- The total amortization period of the loan must be over 7 years, which may vary depending on the bank.
Additional Documents Required
In addition to the above criteria, applicants must provide the following documents as part of their loan application:
- Copies of passport, including the visa page, identity card, or government-issued identity card.
- Marriage certificate (if applicable).
- Copies of bank statements.
- Copies of land or unit title deeds and sale and purchase contracts.
It is worth noting that this is not an exhaustive list and that each bank has its own individual policies.
Interest Rates and Other Factors
The interest rate for the loan will depend on the bank’s specific offer at the time and is typically offered on fixed-rate terms. To get the best rate, it is recommended to compare the rates of individual banks. Other factors that banks consider when granting a loan for a property include their own valuation process to ascertain the fair market value of the property.
“International Home Loans for Foreigners in Thailand Foreigners who wish to purchase property in Thailand but do not live there can apply for the International Home Loan Scheme. Bangkok Bank’s Singapore branch introduced this scheme in 2005, offering up to 70% financing. As demand for this service has risen, they continue to offer it to customers.
What currencies are available for the loan?
The loan can be paid in several currencies.
Is there an administration fee for this service?
Yes, an administration fee applies.
How can I apply?
Applicants must meet in person, so you will need to travel to Singapore for a face-to-face meeting to apply.
Are there any other options besides Bangkok Bank?
The United Overseas Bank (UOB) also offers a similar service. Although they have less experience than Bangkok Bank, business competition leads to competitive deals for customers.
What are the differences?
Both banks have similar terms and interest rates. However, UOB has a slightly higher administration fee. The bank allows customers to apply for the loan in Thailand, eliminating the need to visit Singapore. Ultimately, the choice will depend on the customer’s needs and preferences.”
Mortgage Eligibility Criteria and Legal Protection in Thailand
If you’re considering a mortgage in Thailand, it’s important to understand the eligibility criteria and legal protections offered under Thai law.
What is the relevant legislation?
The Thai Civil and Commercial Code, specifically Section 702.
What are the conditions to qualify for legal protection?
The mortgager must be the rightful owner of the property. The mortgage agreement must be in writing and registered. If the land has a title deed, the mortgage must be registered at the Land Department, Bangkok Metropolis Land Office (Branch), Provincial Land Office, or Provincial Land Office (Branch) where the property is located. If the land does not have a title deed (e.g., a Nor Sor 3), the mortgage must be registered at the District Office where the property is located.
For more information on buying property in Thailand, we recommend reading our popular articles on “Can Foreigners Buy Property in Thailand” and “Reasons to Buy a Condo in Phuket.”
