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Mortgages for Expats in Thailand

Author: Jim Newham
Submitted: November 2016

Up until very recently, it was nigh on impossible for an expat to obtain a mortgage in Thailand. The process is easier now and more and more expats are taking advatnage of this. However, the ease of obtaining a mortgage only applies to buying a registered condominium that is held in your name. Note also that Thai law forbids foreigners from occupying more than 49% of any one building of multiple occupation.

Otherwise though it is wise not to have unrealistic expectations. If you are not a Thai citizen or married to one, your chances of obtaining a mortgage on a house are low. If you are married to a Thai citizen, is it somewhat easier to obtain a mortgage, provided the mortgage is made out in their name.

Informal arrangements, in which the vendor assumes the mortgage, are less common than they used to be. Remortgaging and property speculation are very rare in Thailand, though this is a market with potential.

There is not a huge variety of of mortgage products available, and those that are on offer are on the conservative side. For example, interest rates on fixed mortgages can typuically only be fixed for three years.

Finding a Lender

Only a few lenders are prepared to arrange mortgages for non-nationals. Certain things will make banks keener to lend to you. The longer you have been working in Thailand, the more you earn and being married to a Thai national will all act in your favour. To help you find a good deal from a credible lender, you can ask your estate agent for help.

If you have no luck with Thai lenders, you could look further afield. Some Singaporean banks have a strong presence in Thailand and are generally more flexible with mortgage arrangements.

Eligibility

Normally, for your mortgage application to be considered, you must hold at least a 1-year Thai work permit or resident permit. Furthermore, you must be able to prove that your monthly income exceeds 3 times the amount of the monthly mortgage repayment. If you can pass these initial hurdles, you also need to provide a credit check. It is a good idea to check further eligibility criteria with several lenders as they tend to vary somewhat.

Terms

If the lender is satisfied that you have met the above requirements, they may be ready to start negotiating a mortgage deal. The amount they will be prepared to lend is normally expressed as the loan-to-value ratio (LTV): the loan amount as a percentage of the total value of the property. In Thailand, expats can expect an LTV of around 50%-60% for local lenders. This rises to 70% or even 80% for higher earners.

Repayment periods are generally short at up to 20 and occasionally 30 years, though most periods are shorter. The maximum age at which you can pay off a mortgage in Thailand is 60. Hence if you begin your repayments later in life, you will have to pay at a higher rate.

Application

The documents you need will vary from bank to bank, but will include the following as a minimum:

  • passport (or ID card, if you have one)
  • credit report From your home country
  • a letter from your employer confirming salary and years of service
  • copy of sales agreement
  • a letter from your existing bank confirming your assets
  • proof of income:
    • your last 6 months of bank statements
    • your 2 most recent tax certificates (if self-employed).

 

 

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