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 by 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.
However, the chances are higher 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 the corresponding income in Thailand without any gaps. In addition, he should have at least 50% equity.
A Thai 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 installments can be paid from the income. Income earned abroad is generally not recognised.
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 looks in such a way that the buyer pays 50% and he pays the remaining purchase price at a later date, either with no or usually only low interest. However, the term offered is usually limited to 1 year up to a maximum of 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.
Financing options in Thailand – Real estate loan – Mortgage
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, but with the option of extending it up to 3 years. In addition, these companies 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. One should consider such a financing very well before signing.
At present we can offer financing through private investors with an interest rate of 12% p.a. with an equity of 50%. 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 properties are 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 as quickly as possible.
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 and corona crisis in 2020.