Can a foreigner take a property loan in Thailand?

/Can a foreigner take a property loan in Thailand?

Can a foreigner take a property loan in Thailand?

In short, yes! Thai property loans have existed for a very long time. Thailand has a developed banking system and has been providing mortgages to Thai nationals for Thai properties for a long time. However, it was only in the mid-2000s that foreigners had access to mortgage facilities to purchase Thai property. The first two banks to provide mortgages for foreigners were United Overseas Bank (UOB) Singapore and Bangkok Bank. It is important to note that there are no restrictions preventing banks or financial institutions from providing property loans to foreigners to purchase Thai property.

Foreigners are segregated into two categories. Those that are working or have income in Thailand and those without.

 

Criteria for foreigners WITH an income in Thailand

1) Must be registered as a Thai Resident
Documents required: Passport, Alien Registration Book, Permanent Residence Book.

2) Proof of work in Thailand
Have to be earning an income for a minimum period of 1 year. Must hold a permanent job or have a registered business.
Documents required: Work Permit, Letter of employment or Business Registration Documents (for self-employed individuals).

3) Sufficient income to service loan
Income received has to be more than 3 times the instalment repayment
Documents required: Pay Slips, Bank Statements, Tax Filing Documents and any other documents to prove income earned in Thailand.

4) Information on the condominium purchased
Documents required: The Sale and Purchase Agreement, Proof of Foreign Quota Availability and a copy of the Title Deed to the unit.

5) Other Criteria
Pass a Credit Check and the applicant’s age combined with the loan tenure should not exceed 60 years. (i.e. If the applicant is 40 years old, he can have a maximum loan tenure of 20 years).

 

For foreigners with an income in Thailand, your options are rather wide. You can approach many banks and if you fulfil the criteria, you will have access to a mortgage almost like a local.

For foreigners without an income in Thailand, the financing options are more limited. Most Thailand property investors will fall into this category.

 

Criteria for foreigners WITHOUT an income in Thailand

It is good to note that since Thailand’s property financing market opened up to foreigners, there have been more financial institutions coming on board to lend monies to foreigners to purchase properties in Thailand. The criteria for mortgage approval varies between the different financial institutions and thus this complicates things a little for loan applicants. Even though I will try my best to list out the various financing options here, please note that this list is dynamic and every now and then the criteria changes and there may be new lenders who may come on board.

 

UOB Singapore

Details of loan:

1) Up to 60% financing based on purchase price or valuation amount, whichever is lower.

2) You can choose to take up the loan in Singapore or US dollars.

3) Repayment period of up to 20 years. The applicant’s age cannot exceed 65 at the end of the loan tenure.

Eligibility:

1) Applicants must have a minimum income of USD$65,000 or SGD$100,000 per annum.

2) Please note that this is subject to the Total Debt Servicing Ratio (TDSR) for Singapore Residents.

Here is the link to apply for UOB International Home Loan – Thailand

My opinion:
Most straightforward bank to apply for a Thailand home loan. If you would like to take a Thailand Property Loan as a foreigner, UOB Singapore has one of the simplest processes as compared to other financial institutions. Some Singapore Residents may not want to take a loan from UOB Singapore as it will add to their TDSR.

 

Bangkok Bank

Details of loan:

1) You can finance up to 90% of the property appraisal value.

2) Loan terms of up to 30 years. The applicant’s age cannot exceed 65 at the end of the loan tenure.

Eligibility:

The eligibility criteria are not clearly stated. It seems to vary from banker to banker. I believe that they are in the process of restructuring the loan process as they used to lend out of money from Singapore.

Here is the link to apply for Bangkok Bank Bualuang Home Loans

My opinion:
Used to be rather straightforward to apply for a home loan but in recent times they seem to be focusing on providing loans for foreigners who are earning an income in Thailand than foreigners who are not. That being said, there are still Bangkok Bank bankers who will assist foreigners from outside Thailand to obtain a property loan.

 

MBK Guarantee

Details of loan:

1) No restriction about nationality

2) Loan terms of up to 10 years. The applicant’s age cannot exceed 70 at the end of the loan tenure.

3) Loan purpose can for buying a new or resale condominium, refinancing existing home loan or releasing equity from a property.

4) Loan is available for both complete or off-plan condo projects.

Eligibility:

1) Revenue from overseas can be used for reference.

My opinion:
Just some background information, MBK Guarantee is a financial institution and not a bank. Many of us would be familiar with the MBK Mall close to Siam BTS Station. This is from that same group. MBK Guarantee is extremely aggressive and is making it extremely easy for foreigners to finance their property purchase. Their loan tenures are limited to a maximum of 10 years though.

Here is the link to apply for MBK Guarantee Home Loan for Foreigners

 

Other notable banks providing Thai property loans to foreigners

1) Bank of China (BOC): BOC Thailand Property Loan

2) ICBC: ICBC Thailand Property Loan

3) Standard Chartered Singapore (Only for High Net Worth Individuals)

My opinion:
The Chinese banks are focused on providing Thai Property Loans to foreigners who are earning an income in Thailand. This is due to the large influx of Chinese into Bangkok. There are enough Chinese to support this aspect of the business and that is the reason why they have placed emphasis on this part of the business rather than the sporadic number of cases from clients who apply from outside of Thailand. That being said, there are still bankers who will assist foreigners from outside of Bangkok to get a mortgage on a property in Thailand. Standard Chartered Singapore’s Thai Property Loan is limited to High Net Worth Individuals only and thus is not of notable mention to most property buyers.

 

Other financing solutions

To take an equity loan on your current property in your home country. This is an option many buyers chose to take especially buyers from Hong Kong and Singapore. For example, if the buyer has a fully paid up condominium in his home country, he can approach banks in his home country to mortgage or take an equity loan on his property. The amount will then be used to purchase the Thai property in full. This is advantageous because interest rates in Thailand are higher than interest rates in Hong Kong, Singapore, Malaysia and many other countries. In most cases, home loan interest rates for foreigners are about 6%.

 

Getting a property loan in Thailand is not as straightforward as getting one in Hong Kong or Singapore. The reason is not that banks and financial institutions are not allowed to but more because they are more focused on offering loans to clients from within Thailand. The fact that Thailand regulates that property purchase requires foreign funds to come from outside of Thailand makes it a little more cumbersome for banks to offer Thai property loans to foreigners. That being said, more banks are coming on board to offer home loans to foreigners. This should make it more competitive as time goes by and this should drive rates lower. The thing about getting a loan from a bank is that sometimes you will need to have the contact of a particular banker who is handling loans for foreigners. I have encountered cases whereby clients of mine have failed to get a loan when they walk into the bank but instead obtained it through a contact of mine who works for that same bank they approached. Despite the current high-interest rates and troublesome nature of the home loan application process for foreigners, the Thailand property market is still experiencing consistent, healthy growth in the past few years.

 

Yours Sincerely,
Daryl Lum

p.s. I do not, am not going to and have never received any referral fees from any of the banks or financial institutions which I have mentioned in this article. I wrote this article as a guide for buyers who may want to consider financing their Thailand property investment.

p.p.s. The details and criteria for the various loans mentioned may change over time. I have, in my best capacity, tried to simplify and provide updated information about the financing options for  Thailand property buyers. The banks and financial institutions may change their criteria from time to time. It would be best to always seek updated financial options at the point when financing is required.

p.p.p.s. If you are buying something off plan, i.e. uncompleted, still under construction, you cannot get a loan before completion. You will only apply for a loan when the property is completed and just prior to you taking over the property. For example, if you buy a property today and completion is in 2021, you can only apply for a loan in 2021. The bank or financial institution will not give you an approval today.

 

My other articles about investing in Thailand property

Recognising the different property title deeds in Thailand

Looking to buy a Bangkok condo? Things to take note of.

The good locations for property investment in Bangkok

A compelling case to invest in Bangkok

Guide to buying a property in Thailand

Thailand Property: Legal and Tax Issues

Thailand Property Market Outlook for 2018

Buying property in Bangkok: Payment procedures

Thailand as a retirement destination

How to get a Retirement Visa in Thailand

My personal experience purchasing a property in Bangkok

Things to take note when investing in an overseas property

Factors that determine the property price in Bangkok

2018-06-11T00:32:53+00:00June 9th, 2018|Property|
WhatsApp chat