Thailand is one of the prime destinations when foreigners look for investment and lifestyle property in Asia. Even if the country started to develop decades back, and is far ahead of countries like Vietnam, you’ll see a limited amount of loan options available.
Still, there are a handful of international banks and other loan providers that are worth contacting.
It’s important that you have a fundamental understanding of the application process and what documents that banks require. In this guide, I explain the basics you need to know when applying for a property loan in Thailand.
Process when applying for a property loan in Thailand
It was virtually impossible for foreigners to obtain property loans and mortgages in Thailand in the past. Things have become a bit easier since 2005 when Bangkok Bank and UOB Singapore started offering loans, but still, I wouldn’t say that there are many options available.
The same as it goes in Vietnam, things will become remarkably easier if you’re married to a Thai spouse. You should preferably also have lived in Thailand for at least one year (working) or be a permanent resident.
Pay attention to the fact that the money, sometimes needs to be routed in from overseas and in foreign currency, often in Singapore Dollar (SGD) or US dollars (USD). The first contact will in that case be made with a local branch in Thailand, while the loan is managed from a branch in Singapore.
(This is a common practice in manufacturing and trading also while working in China, I always had to quote Thai produced components in Singapore Dollar (SGD) to our clients, and all our accountants and main contacts were located in Singapore)
This will sometimes require that you visit Singapore to finalize the loan.
Interest rates for Thailand mortgages
Normally ranges between 6-8%, which is remarkably high and can wipe out big parts of your rental incomes.
If you look for investment property and high rental incomes, seeking a local bank loan is probably not the best option.
Banks offering mortgages to foreigners in Thailand
There are a handful of banks that are worth having a look at. Below I’ve included some of the most popular international banks that expats, and foreigners often turn to.
Normally, they take the following aspects into consideration before approving loans to foreigners:
a. Whether you’re working in Thailand and can show proof of income and employment (normally for a minimum period of 1 year)
b. Or, if you’re a (permanent) resident in Thailand
c. If you’re married to a Thai spouse and can act as a guarantor. Simply put, acting as a guarantor means that you can pay for your spouse’s debt if he or she should default on a loan obligation
Standard Chartered, sometimes referred to as SC, offers loans to expats who follow certain criteria.
The following conditions apply in case you decide to go for a loan at Standard Chartered and you’re a permanent resident expat:
a. You must have an Alien Registration Book and Permanent Residence Book
b. You need to work in Thailand
c. You need to show proof of income earned in Thailand
I recommend you to visit Standard Chartered’s website directly, to know more about what documentation you need, whether you’re employed or a business owner.
UOB offers loan to foreigners, in case you make a joint application with your Thai spouse. UOB doesn’t require that you visit Singapore in order to finalize your loan, everything can be managed from a local Bangkok branch.
With loan amounts stretching between THB 500,000 – 50 million, UOB has become a well-known name in Thailand’s loan market. For more information regarding the documents needed when applying for a loan, I recommend you to visit UOB’s website directly.
UOB’s overseas property loan
Keep in mind that UOB’s overseas property loan is dedicated to Singapore and Malaysian citizens, which indeed make up a big part of the investors in Thailand, but leaves you out, in case you’re from another country.
MBK Guarantee Co., Ltd.
MBK Guarantee Co., Ltd. started out in 2006 and is part of the MBK group. You’ve probably seen the MBK mall located at Siam station when visiting Bangkok.
MBK’s loans are only dedicated to foreigners who wish to buy condos in Thailand. Even if it’s fairly easy to receive a loan from MBK, you can only receive a loan amount of up to 50% of the property value. Fair enough, they still give you the option to finance the property only partly in cash.
The loan tenure is 1-10 years and the loan value needs to be at least THB 1 million (around USD 30,000). Other conditions include:
a. No restriction about nationality (same as in Hong Kong)
b. Up to 70 years old when the loan tenure expires
c. You don’t need to be a permanent resident or work in Thailand
d. You don’t need a Thai spouse or a work permit
e. You can use your oversea income as a reference
f. You can buy a new or a second-hand condo, refinancing an existing loan, or for the purpose of releasing equity
h. Self dwelling or investment (renting out) are both okay
i. The loan is available for both complete or off-plan condo projects.
ICBC offers a loan called ‘Foreigner Housing Unfunded Financing’ with clear terms and conditions on their website. The loan is available for non-residents, the same as it goes with many other banks, you’re only able to borrow in Singapore Dollar (SGD).
Other requirements are as follows.
a. Age: 21-55 years old, maximum 60 years old when the loan tenure expires
b. Stable income and good credit
c. Mainland Chinese citizens need work permits overseas, this is not a requirement for people in Hong Kong SAR, Macau SAR, Taiwan ROC, Singapore, Malaysia, and more.
d. Must be completed condos located in Bangkok and its vicinity, the property value to be at least THB 2 million
e. Rates: year 1 = 5.25%, year 2 = 5.57%, year 3 = SIBOR + 6%. SIBOR is the Singapore Interbank Offered Rate
f. Maximum loan amount (LTV): 70%
For more information, I recommend you to visit ICBC’s website directly. Preferably, you can also give them a call for more personal information.
Documents needed when applying for a loan
According to ICBC’s website, you need to bring the following documents when applying for a loan as a foreigner:
- ID in host country
- Work permit
- Salary slip (latest 6 months)
- Salary account bank statement (latest 12 months)
- Sales and Purchase Agreement
- Address proof (e.g. utility bills)
- Credit report (issued by National Credit Bureau in both countries)
- Marriage certificate and spouse passport/ID (if married/divorced)
- Work certificate (issued by employer)
The documents need to be verified copies or original versions. For more information, visit ICBC’s website.
Keep in mind that different banks can require different documents.
You can also have a look at the following banks, that offer loan products to locals or foreigners.
Thailand is a popular destination for many Mainland Chinese, Hong Kongers, and Singaporeans who are tired of significantly high property prices back home.
Still, there’s not an excessive amount of loan options and many investors pay with cash upfront. High-interest rates and requirements stipulating that you need to be a Thai resident or work in Thailand are other reasons why many buyers don’t seek local financing.
Banks that offer loans include ICBC and UOB for example, you also have MBK as an option, even if this is not a traditional bank. It’s important that you prepare and provide the documents needed, keep in mind that these might differ from bank to bank.
For up to date information and an individual assessment, I would recommend you to contact a handful of banks directly, to see what options they have.