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FINANCING FOR FOREIGNERS


Property loan facilities, also known as mortgages*, are common practice in Thailand, yet it is only since the mid- 2000’s that foreigners willing to purchase condominium units in Thailand have had access to bank funding.

The country of residence is not a condition of eligibility – you can get funding whether you reside in Thailand or not, however the requirements are quite tough to match and the interest rates significantly higher than in western countries.

* A mortgage is an agreement by which a bank i) lends money at interest to finance the purchase of a property and ii) keeps the title deed of the debtor's property until full repayment of the debt by the borrower. The property financed is usually the collateral of the mortgage. If the borrower is unable to repay the loan, the creditor keeps the property.


FINANCING FOR FOREIGNERS WITH INCOME IN THAILAND

BANKS OFFERING LOANS TO FOREIGN INVESTORS

UOB (Union of Overseas Banks)

A Singaporean bank with several branches in Bangkok, UOB offers loans to property investors residing in Thailand - or abroad - for the purchase of condominium units exclusively.
Many of our clients have already been using the services of this solid financial institution, reputed for its professionalism and reliability.
Although the funds originate from Singapore, borrowers are able to apply for a mortgage directly at a Thai branch of UOB.

CONTACT US for more information about this service and/or to be put in touch with UOB professionals.

BANGKOK BANK

From 2005 to 2016 Bangkok Bank - one of the main Thai financial institutions - was offering mortgages to foreigners to purchase condominium units in Thailand, either they lived in Thailand or not. The process, requirements and conditions were very close to UOB’s, with the notable exception that borrowers had to fly to Singapore to apply for mortgage since the funds were Singapore-Based.

Unfortunately this activity was discontinued at the end of 2016 until further notice.

BANKS OFFERING LOANS TO FOREIGN INVESTORS

- Registered as a Thai resident

  • Passport, Alien Registration Book, Permanent Residence Book

- Work in Thailand (at least 1 year)

  • Permanent job, work permit, letter of employment contract OR business registration (if self-employed)

- Stable and sufficient income earned in Thailand (fixed income > 3 times each installment repayment

  • Pay slips, letter of employment, bank statements, tax document or any other evidence of income earned in Thailand

- Complete information on the condominium purchased

  • Unit title deed, sale and purchase agreement (SPA), foreign quota available
GOOD TO KNOW – MAIN CONDITIONS OF MORTGAGES FOR NON-THAI CONDOMINIUM INVESTORS BY UOB
  • Loan-to-value of 40 to 80% (=ratio amount lent by the bank / valuation of the condo by the bank, based on the value of the property estimated by the bank)
  • Floating interest rate of 6.5 to 8% (indicative levels based on history between 2007 and 2017) based on a fixed rate + a floating rate indexed on foreign currency
  • Tenor up to 10 years
  • Progressive amortizing of the loan (constant monthly payments of capital + interest)

FINANCING FOR FOREIGNERS WITHOUT INCOME IN THAILAND

UOB also provides financing to foreigners with stable income outside Thailand - for the purchase of condominium units only.
This service has become very popular among foreign investors residing and working in Singapore, Kuala Lumpur and Hong Kong, who account for a growing part of condominium investors in Bangkok but also in Phuket and Koh Samui.

For foreigners living in Thailand but who are not eligible to regular mortgages by UOB because they don’t have a work permit and a stable income in Thailand, MBK Guarantee is the only option available in the market.
Having offer “foreigner friendly mortgage finance options” since 2014, this lender offers a loan-to-value up to 50% and tenor up to 10 years, for any freehold condominium purchase.
Interest rates are higher than with UOB (up to 10%)

CONTACT US for more information aboutthis service and/or to be put in touch with MBK Guarantee professionals.


OTHER TYPES OF MORTGAGES

Over the last few years, we have seen a new type of lender entering the Thai condominium loan market - large western banks.
These banks only lend to investors of the same country of origin, and the mortgage is not on the property purchased in Thailand but on assets held in the country of origin – this is called “collateral mortgage”.
Not only requirements are usually not as strict as they are for mortgages from UOB and MBK Guarantee, but also the conditions of the mortgage are significantly more attractive.

CONTACT US for more information about the banks offering this service. .

CONCLUSION
  • UOB (Union of Overseas Banks) is the best option for most foreign investors to finance their condominium purchase in Thailand, whether they live in Thailand or not. Although rates are higher and tenors shorter than in western countries, it is a valuable option for foreigner who need to finance part of their investment.
  • MBK Guarantee is a new lender worth considering if you don’t have a work permit and a stable income in Thailand
  • Recently, some foreign financial institutions have been offering mortgages in their country of origin for the purchase of condominium units in Thailand, at much lower interest rates than for a mortgage in Thailand.
  • Consult our property specialists and/or your lawyer before any decision regarding mortgages for foreigners in Thailand

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Welcome to Sense Property, the leading Bangkok property agent dedicated to helping expats and international clients find the best properties for rent, for sale and to renovate in Bangkok. With the support of our highly experienced team, you’ll enjoy access to the highest quality condos, apartments, houses, land and commercial properties throughout Bangkok and greater Thailand.

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