Mortgage in Thailand for Foreigners

Buying real estate in Thailand attracts foreign citizens due to the favorable investment climate, developed infrastructure and relatively low prices compared to other popular destinations. However, it is important to understand that for non-residents, obtaining a mortgage loan is associated with certain restrictions and features that must be taken into account in advance.

Requirements for foreign citizens

In Thailand, mortgage lending to foreign citizens is limited and is accompanied by strict requirements from banks and financial institutions. It is important to consider the following features:

• Limited list of banks and organizations
  Most Thai banks do not lend directly to non-residents. Getting a mortgage for a foreigner is possible mainly if one of the following conditions is met:

  • Having official permanent resident status;
  • Official employment in Thailand for at least one year with confirmed stable income;
  • Marriage to a Thai citizen who acts as a guarantor for a loan.

• Property type
  The most readily available loans are for apartments (condominiums), since Thai law allows foreigners to own them without restrictions. It is much more difficult to obtain a mortgage for private houses and villas, since a non-resident cannot directly own the land under the building.

• Loan to value (LTV) ratio
  Loan-to-Value (LTV) ratios for foreigners are lower than for Thai nationals. Typical LTVs for non-residents range from 50% to 70%, with banks generally more willing to finance properties in Bangkok and other major cities with developed housing markets.

• Age and financial requirements
  A foreign borrower must be between 20 and 55 years old (at the time of application) and have documented stable income. To approve a loan, banks require:

  • Availability of a down payment in cash in a bank account;
  • Good credit history confirmed by the Thai National Credit Bureau (NBC – https://www.ncb.co.th/ );
  • Provision of a full package of documents confirming employment, income and financial stability.

• Loan terms and interest rates
  The mortgage term for foreigners is usually limited to 10-20 years, in rare cases lending for up to 30 years is possible. Interest rates for non-residents are traditionally higher than rates for Thai citizens, due to additional risks from banks. Banks offer both fixed rates for short terms (usually from 2 to 5 years) and variable rates tied to key bank indicators (MLR, MRR).

Thus, although mortgages for foreigners in Thailand are associated with restrictions and additional requirements, this financial instrument remains a popular and quite accessible way of financing real estate, subject to certain conditions and compliance with formal procedures.

Banks that provide mortgages to foreigners in Thailand

Several major banks in Thailand provide mortgage loans to foreign citizens, but each has its own terms and conditions.

Bangkok Bank

Bangkok Bank ( https://www.bangkokbank.com/ ) is known for its competitive mortgage programs for international investors looking to purchase property in Thailand.

Features of mortgage from Bangkok Bank:

• Variety of mortgage products: loans with fixed and variable interest rates.
• Attractive interest rates and flexible repayment terms.
• Borrowers must have a stable income, confirmed employment and a positive credit history.
• The bank finances a certain percentage of the property value.
• Support and advice for foreign clients at all stages of the mortgage process.

United Overseas Bank (UOB)

UOB ( https://www.uobgroup.com/ ) offers specialized mortgage solutions designed specifically for expats planning to purchase property in Thailand.

Features of mortgage from UOB:

• Personalized mortgage programs with competitive rates.
• Possibility to choose different repayment options and loan terms.
• Multi-currency service suitable for borrowers receiving income in different currencies.
• Personal consultations with bank experts throughout the entire lending process.
• The loan is available for condominiums in Bangkok and selected popular areas (e.g. Phuket).
• The maximum loan amount is up to 70% of the estimated or market value.
• The loan term is up to 30 years, subject to a work permit in Thailand for at least 2 years and a confirmed income of 140,000 baht per month.

Government Housing Bank (GHB)

Government Housing Bank (GHB) – https://www.ghbank.co.th/ – offers mortgage loans with favorable terms for foreign nationals and low-income families.

Features of a mortgage from GHB:

• The programs are designed to support clients who do not always meet standard banking criteria.
• Flexible repayment plans and reduced interest rates.
• Opportunity for foreign residents to obtain a loan to purchase real estate in Thailand.
• GHB plays an important role in increasing housing affordability and financial inclusion.

Industrial and Commercial Bank of China (ICBC)

ICBC ( https://www.icbcthai.com/ ) is the largest Chinese bank providing mortgage loans for real estate in Thailand to foreigners.

Features of mortgage from ICBC:

• Borrower's age: from 21 to 55 years, no older than 60 by the end of payments.
• Proof of income and a positive credit history are required.
• Maximum loan up to 70% of the cost for loan amounts up to 7.5 million baht and up to 60% for higher amounts.
• Loan currency: Singapore dollars (SGD).
• Loan term: from 3 to 15 years.

MBK Guarantee (MBK-G)

MBK Guarantee ( https://www.mbkg.co.th/ ) specializes in condominium loans for foreign nationals in popular regions of Thailand.

Features of mortgage from MBK-G:

• No work permit or permanent resident status required.
• Financing up to 50% of the property value.
• The loan currency is Thai baht (THB).
• The maximum age of the borrower is 70 years at the end of the loan.
• Loan term: from 1 to 10 years.

Standard Chartered

Standard Chartered ( https://www.sc.com/ ) offers mortgages to foreigners working in Thailand, subject to certain requirements.

Features of mortgages from Standard Chartered:

• Permanent residents require proof of registration and income in Thailand.
• Non-residents must have a work permit for at least 3 years and be married to a Thai citizen who will be the main borrower.

HSBC, Siam Commercial Bank (SCB) and Tisco Bank also provide mortgage loans to foreign citizens in Thailand. The terms of lending in these banks require individual consideration.

How much does a mortgage cost in Thailand: types of loans and interest rates

In Thailand, foreign borrowers can choose between two main types of mortgages: fixed-rate and variable-rate. Each option has its own characteristics, benefits, and potential risks.

You can also use online mortgage calculators on popular Thai real estate portals:

• DDProperty
• Thailand-Property

Fixed-rate mortgage

A fixed interest rate provides stability in payments as it remains the same for a certain period, which in Thailand is usually between 2 and 5 years (most commonly 3 years). This makes this type of mortgage attractive to borrowers who prefer predictability in their financial obligations.

Main characteristics of a fixed mortgage:

• The interest rate remains unchanged, protecting the borrower from market fluctuations.
• Provides confidence in the amount of monthly payments, which simplifies financial planning.
• May be less profitable in the long run if market rates decline.
• At the end of the fixed period, the rate becomes variable, or the bank offers to revise the terms.
• The maximum loan term is up to 30 years (depending on the age of the borrower and the bank’s policy).

This type of mortgage is particularly suitable for those who plan to live in the property for a long time and wish to avoid the risk of interest rate increases.

Variable-rate mortgage

A variable interest rate is linked to key bank metrics such as the minimum lending rate (MLR) or minimum retail lending rate (MRR). This means that payments can change depending on market conditions.

Key features of a variable mortgage:

• Possibility of a lower initial rate compared to fixed loans.
• The monthly payment amount varies depending on market conditions.
• May be beneficial during periods of falling interest rates.
• Requires readiness for a possible increase in rates and, accordingly, payments.

Often Thai banks offer hybrid lending schemes, for example:

• First two years: MRR minus 2%
• Third year: MRR minus 1%
• Subsequent years: standard MRR

These mortgages typically have terms of 15 to 30 years and are suitable for borrowers who are willing to accept some risk for potentially lower payments, especially as market rates decline.

Current interest rates and conditions for foreigners

Mortgage interest rates for foreigners in Thailand are generally higher than for Thai citizens, averaging between 8% and 12% per annum. This is due to the increased risks that banks take on. In 2023, the Bank of Thailand raised its key interest rate to 2.25%, which also affected the growth of mortgage rates.

What amount can you get on a mortgage?

The size of the mortgage loan depends on a number of factors:

• Age of the borrower
• Credit history
• Income level
• Real estate value

For foreign borrowers, banks typically finance between 50% and 70% of the cost of the property being purchased. Although loans of up to 80-90% of the cost of the property are available to Thai citizens, foreigners have to count on lower rates.

Additional costs when applying for a mortgage

In addition to the down payment and monthly payments, the borrower will face additional expenses:

• Agent fees (usually paid by the seller, but there are exceptions)
• Registration fee for transfer of property (2% of the property value)
• Legal services (around 20,000-30,000 baht)
• Bank commission (about 1.25% of the loan amount)
• Mortgage registration (0.01% of the loan amount)
• Stamp duty (0.05% of the loan amount)
• Registration of purchase and sale transaction (1% of the property value)

Property insurance

Property insurance is not a requirement, but it is recommended. Most condominiums already include building insurance as part of their management fees. Additionally, it is recommended to purchase property and valuables insurance.

Many banks also require the borrower to take out Mortgage Reducing Term Assurance (MRTA) to protect the loan in the event of serious illness, disability, or death of the borrower.

Early repayment and refinancing of mortgages

Early repayment of a mortgage is possible, but banks often charge penalties for this, especially in the first 3-5 years. It is possible to pay an additional amount monthly or in one lump sum at the end of the year, which reduces the overall interest costs and shortens the loan term.

Refinancing allows you to take out a new loan on more favorable terms, but foreigners are limited in their refinancing options, since not all banks provide this service.

If you are experiencing financial difficulties, it is important to contact your bank immediately to discuss possible options, such as loan restructuring or a temporary payment deferment.

Installment plan from the developer: an alternative to a mortgage

Buying real estate in installments from a developer is an alternative to a mortgage for foreign citizens, especially in the case of purchasing housing at the construction stage. Installments can be provided both for the construction period and for several years after the commissioning of the facility.

Features of installment plan from the developer

1. Interest-free installment plan for the construction period
   • Developers offer interest-free installments while the property is under construction.
   • Payment is made in stages, according to the work schedule.
   • Additional discounts (up to 10%) are possible if the apartment is paid for in full at the initial stage.
2. Extension of installment plan after completion of construction
   • In some projects, the installment plan is extended to 3–5 years after the completion of the project.
   • Interest in the range of 3–7% per annum is accrued on the remaining amount.
   • The shorter the installment period, the lower the interest rate.
3. Registration of property
   • Full ownership of the property is transferred to the buyer only after full payment.
   • In some cases, you can use the property immediately after the property is completed, provided that you make an initial payment.

The main advantages of installment payments

• The absence of interest during the construction period is a profitable option for investors planning to sell after completion.
• Minimum requirements for the borrower - no proof of income, credit history or employment in Thailand required.
• Flexible terms - in some cases, it is possible to agree on a personal payment schedule.

Disadvantages of installment plans

• Limited options - installment plans are only available for new properties from the developer.
• Risks associated with the developer - if the company goes bankrupt, the buyer may lose the funds invested.
• Ownership rights are transferred only after full payment - the property cannot be sold or mortgaged to a bank until it is fully paid for.

Installments from the developer are a convenient tool for financing real estate, especially for those who buy housing at the construction stage. However, this option is not suitable for everyone: if the immediate transfer of property is important or a long payment period is required, a mortgage remains a more reliable choice. Before making a decision, it is worth assessing your financial situation and carefully studying the reputation of the developer.

Frequently Asked Questions (FAQ) about Mortgages in Thailand

Can a foreigner get a mortgage in Thailand?

Yes, foreigners can get a mortgage in Thailand, but banks have strict requirements. The main conditions include having a work visa or work permit, a stable income and a good credit history.

What documents are needed to apply for a mortgage?

The exact list of documents depends on the bank, but usually the following is required:

• Passport
• Work permit (if required)
• Bank statement
• Proof of income (certificate from employer or tax returns)
• Credit history (if applicable)

It is recommended to clarify the list of documents directly with the lender.

What is the maximum loan amount that can be obtained?

The maximum LTV (Loan-to-Value) ratio for foreigners is 50-70% of the property value. This means that the borrower must make a down payment of 30-50%.

What are mortgage interest rates in Thailand?

Interest rates vary from 5% to 8% depending on the bank's terms, the loan term and the borrower's credit history. Banks may offer both fixed and floating rates.

Is it possible to pay a mortgage in foreign currency?

Some banks allow payments in foreign currencies, but in most cases payments are made in Thai baht (THB), which reduces currency risks and exchange rate fluctuations.

Is it possible to get a mortgage for a house under construction?

Banks do not usually provide loans for the purchase of real estate at the construction stage, since a registered title deed is required to obtain a mortgage. However, some developers offer installments on such terms.

Is it possible to get a loan in Thailand without being a resident of the country?

Yes, non-residents can apply for a mortgage from UOB and ICBC. However, for citizens of certain countries, such as Hong Kong, special lending conditions apply to ICBC.

What is developer financing and how is it different from a bank loan?

Vendor financing is an opportunity to arrange an installment plan with a developer rather than a bank. This option is more flexible, but usually:

• Limited to 50% of the property value
• Has a shorter repayment period (up to 5 years)
• Interest rates may vary

What types of properties can be financed in Thailand?

Foreigners can only get mortgages for freehold condominiums, as land and other types of property ownership are restricted. In some cases, developers may offer financing for leasehold properties through the vendor financing system.