Can foreigners take out a mortgage to purchase a condo in Thailand?
Thailand has no restrictions relating to nationality, therefore any foreigner can buy and own a condo unit. While it is possible to purchase a condo in Thailand, financing the purchase can be difficult but not impossible.
2 realistic and feasible options
As it stands there are 2 realistic and feasible options available to foreigners wishing to finance the purchase of a condo in Thailand:
- Taking out a loan from a bank. There are a limited number of banks in Thailand who are prepared to loan money to foreigners (UOB and HSBC being the most likely candidates). Any loan received from these banks will be based on the financial statements provided by the applicant.
- Remortgaging any property or assets the purchaser holds in their home country.
Taking out a loan in Thailand
When purchasing a property in our home country, one of the first things we consider is financing. Financing is an important consideration for everyone thinking about making a purchase as it either allows you to to leverage to most out of the investment, or simply be able to afford it.
Foreigners are very unlikely to be able to receive a loan from a Thai Bank to purchase a property in Thailand. In order to get around this issue, there are a few banks (international banks with a presence in Thailand) who can offer loans to customers in Thailand via their foreign branches. For example, UOB Singapore can offer mortgages to customers in Thailand on the condition that UOB Thailand secures the loan. Other banks who offer this kind of service include HSBC and ICBC. Please note that while ICBC is open to offering financing to foreigners, they will usually only lend to Chinese customers and customers from a select few nations such as Singapore and Malaysia.
Below is some information relating to the type of finance you can receive from these banks:
- The loans offered by these banks are usually available in USD, SGD or the currency from the country in which the bank is based e.g Euros or Yuan.
- The maximum loan amount is up to 60%-70% of either the purchase price or valuation.
- In order to evaluate the value of the condo, the Thai branches of the chosen bank will send someone to value the condo. This valuation will be used as the basis for the mortgage offer from the bank.
- Interest rates are slightly higher than those offered by banks in Thailand (starting from around 4%)
- The maximum loan tenure is 30 years (or until the borrower reaches 70 years of age).
Mortgaging any property/assets you own in your home country
If you are in possession of assets in foreign country, they can potentially be used as leverage for funds to use in Thailand. France is an excellent example of how this could work. If you own a property in France (and any existing loans/mortgages that have been taken out against this property have been paid off), you could use it as collateral for a new loan. Essentially you would be remortgaging your property and once the funds have been released you can use it for anything, in this case, fund the purchase of a property in Thailand.
Please note that banks from other countries may also offer the same or similar services.
Important information to consider
It is important to note that the purchase price for the condo must be transferred into Thailand from abroad in a foreign currency and then exchanged into Thai baht by a recognised Thai bank. The Thai bank will then issue the purchaser with evidence to show that the money has been transferred and exchanged into Thai baht in the form of a foreign exchange transaction form (FET Form) or credit note.
Also, the purchase of the condo must be within the foreign ownership quota of the condominium.
While Thailand may be an increasingly popular destination for people looking to invest in property in South East Asia, financing options are difficult but not impossible. If you are employed in Thailand and have been for a few years, it is possible to obtain financing within the country from banks such as UOB and HSBC. There are also options available in your home country as well, such as remortgaging your existing assets.
For more information about real estate in Thailand, please visit this link: https://www.belaws.com/thailand/real-estate/