Up until recently it was virtually unheard of for a foreigner to be granted a mortgage to buy a property in Thailand. This and many other property related issues faced by potential foreign buyers are slowly changing, but still there is a long way to go before a foreigner will be able to purchase land in Thailand. There has been a slight shift in Thai banking policies and many high street banks now allow foreigners limited access to mortgaging property in Thailand. In part this is a result of the Thai Government’s desire to make Thailand more attractive to tourists and foreign investors.
There are rather strict rules for foreigners applying for a mortgage. The most important rule is that the property has to be registered in the foreign owners name as a condominium, as according to the Condominium Act. So if you are from the UK and want to take out a mortgage in Thailand with a Thai bank in your name in order to buy a house, forget it! At least for now. If you have a Thai partner you could arrange a mortgage in their name, monthly income of your partner being taken into consideration. If you help pay the mortgage in this way you will have little or no rights to the property. So if your relationship ends, as many do, it’s not an advisable option!
There are many other criteria that must also be met for a mortgage to be granted, these include;
- A letter of employment showing how long you have worked for your company in Thailand, together with details of annual salary.
- Pay slips – usually at least six months.
- A copy of your company registration documents.
- Credit check – The bank issuing the mortgage will conduct a thorough check on your credit status.
- Your age combined with the loan period must not exceed 60 years.
- You must have a stable and secure job.
- You must have a fixed income at least three times higher than each instalment repayment.
- For some banks the loan must be for at least 7 years.
You may also be required to submit the following documents to the bank upon application.
- Copies of your passport including visa page, ID card or government official ID card.
- Thai and/or foreign Marriage certificate of the applicant and spouse (if applicable).
- Confirmation of income or salary, and copies of bank statements normally six months or more.
- Copies of land or unit title deeds, sale and purchase contracts.
The interest rates for these types of loan are normally based on the MLR (Minimum Lending Rate) or on a fixed interest rate depending on the bank offer at the time. As these loans are offered locally, the interest rates are usually a bit more competitive and don’t forget to shop around!