Property Mortgage Loans in Thailand for Foreigners

Thailand not only attracts millions of visitors for leisure travel; this fast-developing country is also extremely popular for career-minded professionals and retirees. Living in Thailand offers an affordable cost of living compared to many western countries, a laid-back lifestyle, and access to modern infrastructure and services. Additionally, it is easily accessible from most international locations.

For many, buying a property in Thailand is an appealing prospect, with many foreigners now owning property. Maybe you are wondering what funds you will need to purchase a property or are wondering if a foreigner can get a mortgage in Thailand. Broadly, the answer is “YES”, though some conditions apply.

Although Thailand’s property ownership laws are becoming more open, it is only since the mid-2000’s that foreigners have been able to access bank funding, with UOB and Bangkok Bank leading the charge by offering a limited range of mortgage products.

Nowadays, a slightly wider choice of lenders is in the field. However, the loan conditions remain pretty restrictive. Generally speaking, the loan to value (LTV) ratio and interest rates are higher than locals, and the repayment period is much shorter.

It comes down to individual circumstances if a mortgage is to your advantage. Investors need to consider such factors and weigh the return on investment. On the other hand, a homebuyer may find it financially and personally more attractive to buy a property in Thailand rather than continuing to pay out ‘dead’ rent money. Let’s take a look at the available options.

UOB (United Overseas Bank Limited)
UOB can provide a property loan package if you consider buying a freehold condo in Thailand as a residence or investment. Importantly, you do not need to hold a work permit in Thailand or be living in Thailand. Following are some of the conditions:

UOB’s general mortgage terms and conditions are available for properties in Bangkok and select upcountry locations

The principal amount is up to 70% of the purchase price
The loan currency is Singapore Dollars (SGD) or American Dollars (USD)
The mortgage term/tenor is up to 30 years
Non-Thai condominium buyers, LTV is 40 to 80% of the bank’s estimated value
Interest rates (around 6%-8%) are significantly higher than Thai interest rates

UOB typically gives priority to buyers from Singapore and Malaysia. Foreigners can apply for a mortgage directly at any Thai branch, although funds still come from Singapore.

Check out UOB International Property Loans

ICBC (Industrial and Commercial Bank of China (Thai) Public Company)
ICBC offers mortgages for Thailand-based properties for buyers from China, Hong Kong, and Macau. In addition, for non-Chinese citizens, ICBC offers Foreigner Housing Unfunded Financing for buyers of properties in major Thailand cities. Below are some of the conditions:

ICBC’s mortgage is available for completed condominiums with a value of more than THB 2.5 million located in main Thai cities and provinces (e.g., Bangkok, Phuket, Pattaya). Properties may be for investment or residential purposes

It is open to applicants between the ages of 21 and 55 with a stable income stream and good credit history. The sum of the applicant’s age plus the tenor should not exceed 60 years.

Chinese-mainland citizens must have a work permit in overseas countries. However, for other foreigners, a work permit is not required.

The loan amount is from 1.5 to 15 million THB
Properties valued between 1.5 to 7.5 million THB can get a maximum of 70% of the purchase price or appraisal price (whichever is lower);
Properties above 7.5 million THB can get a maximum of 60%
Repayments are automatically deducted from the mortgagee’s ICBC (Thai) account and converted to SGD on the repayment date
The current fee rate is 5.25% for 1st year, 5.75% for 2nd year, and 1 Y SIBOR+6.0% for 3rd year and onwards
Prepayment is allowed, with a penalty depending on the outstanding principal balance. 3% for the first 3 years and 1.5% after the first 3 years.
The mortgage term is 3 to 15 years

For more detailed information and rates, go to ICBC Foreigner Housing Unfunded Financing

MBK Guarantee
MBK Guarantee is an established player providing financing to foreigners buying property in Thailand. Short-term and medium-term loans are available for customers, using Thai property as collateral and requiring funding for residential and commercial properties. There is no requirement for a Thai Work Permit or Permanent Residence.

MBK Guarantee Co., Ltd. was presented with two “International Finance Awards 2021” for:

Most Innovative Real Estate Mortgage Company
Best Expatriate Loan Servicing Company

Here are some key conditions:

Only property in prime areas is considered, such as Bangkok and key resort provinces/areas such as Chonburi, Pattaya, Hua Hin, Cha-Am, Hat Yai, Chiang Mai, Chiang Rai, Udon Thani, Khon Kaen, etc.
The loan is borrowed and repaid in Thai Baht, with repayments through mobile banking or international payment
The loan-to-value is up to 50%, with a minimum of 1 million THB
The tenor is between 1 and 10 years, and the maximum age at the end of the contract is 70.
Monthly instalments are required with an option of a balloon payment up to 50% of loan size at maturity.
Due to higher risk, interest rates may be slightly higher than other lenders.

Check out MBK Guarantee for further details.

Thai Retail Banks
Another option for a foreigner married to a Thai citizen is to access joint mortgage products from the large Thai retail banks. Alternately, some will allow indirect access to financing by lending to the Thai spouse, and the foreign national acts as a “Guarantor”.

In most cases, the foreigner must have a Thai Work Permit with an established Thai company for at least one year. The Thai spouse also needs to be a working professional, as the bank is essentially lending based on the Thai person’s credit profile.

Bangkok Bank did offer mortgage loans to foreigners from 2005 to 2016. This practice has ceased. However, many consider it the best bank for expats, being most welcoming to foreigners and non-residents and with the largest international presence. It has a Foreign Currency Deposit Account for expats and is one of the five largest companies on the Stock Exchange of Thailand for international wire transfers.

Kasikorn Bank does not offer direct mortgage loan products to foreigners. They do provide a Foreign Currency Deposit Account for expats and consumer, commercial, and corporate banking services. Along with Bangkok Bank, it is the most popular bank for both citizens and foreigners.

Foreign Banks
In recent years, large western financial institutions have been offering mortgages in their country of origin to purchase condos in Thailand. In these cases, the mortgage is on the buyer’s assets from their home country, referred to as a “collateral mortgage”. This is often more attractive in terms of conditions and interest rates than UOB, ICBC, and MBK Guarantee products.

In Summary
If you are considering buying property in Thailand but feel it is financially out of reach, take a closer look, as there are options. Buying into new developments or a pre-loved home could be easier than you think. To help you find the right property, contact our Lazudi agents.You may also be interested in: