Mortgages and loans in Thailand

If you are unable to pay for a property outright, then you may be looking for a home loan with local financial institutions. The good news is that loans are available for foreigners who meet the right criteria and here are more information about the process, the interest rates and the terms for mortgages and loans for foreign investors.

Can foreigners get a mortgage in Thailand?

Foreigners in Thailand are permitted by law to get a mortgage to purchase a property, however, they will need to meet certain criteria in order to qualify, and the long term residency is one of the key requirements to get a loan for a real estate project:

Foreign investors must have an appropriate visa, allowing them to stay in the country, and a tourist visa is not considered suitable.
They must be a holder of a valid work permit. In order to have a work permit, a non-B visa or a non-O visa, is required.
Foreigners that hold permanent resident status may also qualify for a mortgage.

Other criteria that need to be met for personal loans for foreigners in Thailand include:

- The foreigner’s work permit must have been valid for at least one year.
- They must also be able to demonstrate proof of employment. Having a work permit does not necessarily mean the foreigner is still employed.
- Evidence of the foreigner’s salary must be provided.
- The foreigner must be able to demonstrate that their job is stable and secure.
- Company documents from the foreigner’s employer may also sometimes be requested.
- Some banks will expect the aggregate amortisation of a loan to be greater than 7 years.
- The foreigner must be able to pass a credit check.
- The foreigner’s total income must be at least three times greater than the monthly instalments of the loan.
- When combined, the length of the loan and the applicant’s age cannot be greater than 60 years.

What are the terms and conditions regarding getting a home loan?

When applying for a loan in Thailand as a foreigner, you will need to be able to produce the following documents:

- A passport that is still valid for at least another 6 months that also has the appropriate immigration stamps.
- An appropriate, valid visa.
- Where applicable, the foreigner will need to present a marriage or divorce certificate.
- Bank statements that cover the previous 6 months.
- If the foreigner’s spouse is a co-borrower, the spouse will need to present documentation consenting to the mortgage.
- The foreigner will need to produce utility bills in order the prove their address.
- The foreigner will need to produce credit bureau from their country of residence.
- A deposit receipt.
- A condominium title, if applicable.
- A valuation report.

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Foreigners will be granted the same mortgage interest rates as Thais and obviously, the rate you will be offered will be according to what is available at that time. There is considerable competition in the Thai loan market, so it makes sense to shop around to get the best rate for you.

The amount granted will depend largely on your personal income and other factors. Thai lenders will typically carry out a valuation of a property themselves before approving an amount.

A home loan for foreigners in Thailand will typically be granted for 10, 20, or 30 years. However, factors such as the foreigner’s age will restrict how long a mortgage period can be.

How to get a mortgage with a limited company?

Foreigners are permitted to have their own limited company to run a business in Thailand and while they would need to meet certain criteria, one of which is that they cannot own more than 49% of the shares, they are permitted to own more shares than anybody else. Therefore, setting up their own Thai limited company is a relatively common method that foreigner’s use to buy land in Thailand.

Foreigners are not permitted to own land in their own name, but they are permitted to own land in their company’s name. The foreigner will then own the land for as long as they own the company. A foreigner in Thailand is also able to use a Thai limited company to get personal loans. Obviously, the company itself will need to meet certain criteria, particularly being in a financial position to repay the mortgage.

For a foreigner to be granted a mortgage through a Thai limited company, they and their company will need to meet the following criteria.

- The directors must present their passport which must be valid for at least another six months.
- The directors must present their utility bills as a proof of address.
- Credit bureau reports must be presented for the company, and for directors of the company.
- A financial statement that has been audited by the CPA must be produced.
- A shareholder’s list must be provided.
- The company’s official affidavit must be presented, and it must be valid for at least another three months.

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Should I use local lending companies instead?

If you do not meet the criteria determined by the banks, you might still be able to get a mortgage with a local lending company and this is also an option for foreigners whose source of income comes from overseas.

One example of a local lender giving personal loans for foreigners in Thailand is MBK guarantee. They do not require a work permit, marriage certificates, or residency in order to grant a loan but the downside to this route is that the interest rates will be significantly higher than standard mortgage interest rates in Thailand. Indeed, the fixed rates through a local lender will likely be in the region of 8.75% to 9.07%, making the loan considerably more expensive.

Although the requirements of local lenders are less strict, they will still require you to meet some criteria:

- A passport valid for three months, with a valid entry stamp.
- Bank statements from the previous 6 months.
- Consent from spouse if they are to be a co-borrower.
- Utility bills as proof of address.
- Credit bureau reports from the foreigner’s country of residence.

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