Property financing in Thailand
When it comes to overseas buyers, Thailand is commonly believed to be a cash market. To some extent it’s true (operating under the assumption that the buyer is non-resident and doesn’t have Thai family). However, while mortgage isn’t normally available to foreign buyers via Thai banks, there are still some options if you prefer not to pay cash (or just want to optimize your cashflow).
1. Construction payment plans. When buying off-plan most developers will offer an option to pay in installments during construction period. Normally this will include a contract payment (20-30%), installment payments tied to the project completion status, and a final balloon payment on the completion/handover. Obviously these plans only last as long as the period from presales to property completion - 2-3 years - and the duration of your plan decreases the later in the project lifecycle you buy. However, considering generally low price levels in Thailand, this model works for many people.
2. Developer in-house financing. If the construction payment plan is not enough, you will be happy to find out that some developers offer their own solutions, where you can continue paying for the unit for a number of years after its completion and receiving the keys. Typically deferred payment plan will be available for up to 5 years and up to 50% of the unit price. While this is not true financing, the upside is that since there is no disbursement of funds and the title deed isn’t transferred until full amount is paid, the application process is extremely simple. Contact us to learn more about availability of these offers.
3. Bank mortgage. Remember we said a couple paragraphs above that foreigners can’t get mortgage in Thailand? Well, they actually can. Kind of. Some of the international banks will actually offer financing to foreigners, but it’s only available for the purchase of pre-qualified completed (or very close to completion) condominium projects (mostly in Bangkok), and there are some additional qualifications compared to the regular mortgage application process. Again, you can contact us to learn more.
4. Non-bank loans. There are some non-bank institutions providing financing to foreigners, however in most cases it’s either (1) being offered for a very narrowly qualified list of properties or (2) being offered at fairly high interest rate.