Real estate financing
Mortgage – Real estate financing Thailand
Foreigners in Thailand usually have no possibility to get a bank loan (mortgage) to finance a property. Although exceptions confirm the rule, the hurdles are extremely high.
Applications for financing are gladly and politely accepted by the bank, even from foreigners, but after a few weeks the same answer is always given: Sorry……cannot…..The rejection rate is estimated to be over 99%. So usually a waste of time.
The chances are higher, however, if the foreigner wants to buy a condominium and has been working in Thailand for more than 3 years in a row with a work permit and can prove corresponding income in Thailand without gaps. Furthermore, he should have at least 50% equity capital.
A Thai person must also prove income in order to obtain a real estate loan. And not only on paper, but also on the basis of bank statements showing the monthly income. The income must be sustainable and in a healthy relation to the desired real estate loan, i.e. it must be guaranteed that the monthly instalments can be paid from the income. Income earned abroad is generally not recognised.
Real estate financing
Greatest caution should be exercised in this regard with credit advisors who offer to procure such real estate loans through foreign banks or funds. Often an “application fee” is charged here, which often amounts to 50,000 or 100,000 Baht and which is usually lost even if the loan is refused. And the refusal seems to be the rule here as well.
Nevertheless, there are sometimes financing possibilities:
Some sellers offer private financing to a buyer. This usually involves the buyer paying a deposit of 50% and then paying the remaining purchase price at a later date, either with no interest or usually only low interest. However, the term offered is usually limited to between 1 and 3 years.
In addition, property developers also often offer financing, but these are often not real financing offers, but are only partial payments during the construction phase until the handover of the keys. There are also sometimes property developers who offer financing for several years.
Some investors offer private financing as well, up to 50 %, interest rate approx. 10 %. The mortgage is secured by the property, so private financial background of the buyer is not checked at all.
Then there are private companies that offer real estate financing. 50 % equity capital is a prerequisite. But the interest rates are quite astronomical : 8-10 % for condominiums for up to 10 years and about 12-15 % for houses. For houses, financing is often limited to one year, with the option of extending it to up to 3 years. These companies also require such a strong security in the land register that the house is automatically transferred to the lender if you do not meet your obligations. Such financing should be considered very carefully before signing.
At present we can offer financing through private investors with an interest rate of 10% p.a. with 50% equity. No proof of income required ! Please contact us if you are interested : Contact
The lack of financing possibilities has of course also an enormous advantage for the investor: in those regions of Thailand where the real estate market is dominated by foreigners, such as in Pattaya, there is no credit bubble. Almost all real estate is paid for in cash and there is no pressure in the market from emergency sales, which often occur elsewhere because owners become unemployed, for example, then can no longer pay the installments for their real estate loan and then have to sell quickly.
This risk, which is practically non-existent here, gives the market an enormous stability factor, which has been more than clearly demonstrated, for example, in the past economic crisis.