Property mortgages in Thailand are a crucial financing option for individuals and businesses seeking to purchase houses, condominiums, or commercial properties. However, mortgage lending practices, eligibility requirements, and legal restrictions differ significantly from Western countries, especially for foreign buyers.
While Thai banks and financial institutions offer mortgage loans, foreigners face strict regulations and limited mortgage availability compared to Thai nationals. Understanding loan eligibility, interest rates, repayment structures, and legal implications is essential for anyone considering property financing in Thailand.
This article provides an in-depth guide to property mortgages in Thailand, covering Thai mortgage laws, loan eligibility, lending institutions, interest rates, and mortgage enforcement mechanisms.
1. Legal Framework Governing Mortgages in Thailand
Mortgage lending in Thailand is regulated under the following laws:
✔ Civil and Commercial Code (CCC), Sections 702–746 – Governs mortgage agreements, foreclosure rights, and lender protections.
✔ Land Code Act B.E. 2497 (1954) – Regulates land and property ownership for foreigners.
✔ Condominium Act B.E. 2522 (1979) – Defines mortgage rights for foreign condo buyers.
✔ Bank of Thailand (BOT) Regulations – Sets policies for interest rates, loan-to-value (LTV) ratios, and mortgage approval criteria.
✔ Financial Institution Business Act B.E. 2551 (2008) – Regulates banks, lenders, and their mortgage lending practices.
🔴 Key Restriction: Foreigners cannot mortgage land or landed property (houses, villas, or townhouses) unless done through a Thai company or Thai spouse. However, foreigners can obtain mortgages for condominiums under specific conditions.
2. Who Can Apply for a Property Mortgage in Thailand?
Thai mortgage lending is primarily designed for Thai nationals and Thai companies. However, certain foreign buyers may be eligible under limited conditions.
✔ Thai Nationals – Full access to mortgage loans from Thai banks.
✔ Foreigners with Permanent Residency – Some banks provide mortgages if residency status is verified.
✔ Foreigners with Work Permits & Thai Income – Banks may approve loans if the applicant earns income in Thailand.
✔ Foreigners Buying Condominiums – Some Thai and foreign banks offer mortgages for condo units under the foreign quota.
✔ Thai-Registered Companies – Foreigners owning a Thai company can secure mortgages through the company structure.
🔴 Foreigners with no Thai income or work permits generally cannot get mortgages from Thai banks. However, they may apply for loans from foreign banks that offer property financing in Thailand.
3. Types of Property That Can Be Mortgaged in Thailand
| Property Type | Can Thai Nationals Mortgage? | Can Foreigners Mortgage? | Remarks |
|---|---|---|---|
| Condominiums | ✅ Yes | ✅ Limited | Foreigners must qualify under the 49% foreign ownership quota. |
| Landed Property (Houses, Villas, Townhouses) | ✅ Yes | ❌ No | Foreigners cannot own land directly, hence no mortgage eligibility. |
| Commercial Properties | ✅ Yes | ❌ No (Directly) | Foreigners can mortgage through a Thai company. |
| Land Parcels | ✅ Yes | ❌ No | Land ownership is restricted for foreigners. |
✔ Exceptions for foreigners: Some foreign banks and offshore financial institutions provide mortgages for high-end real estate purchases in Thailand.
4. Major Thai Banks Offering Property Mortgages
The following Thai banks provide property loans to Thai nationals and selected foreign buyers:
✔ Bangkok Bank – Offers condo mortgages for foreigners with income from Thailand.
✔ Kasikorn Bank (KBank) – Provides loans for condos under foreign quota.
✔ Siam Commercial Bank (SCB) – Special programs for Thai nationals and PR-holding foreigners.
✔ Krungsri Bank (Bank of Ayudhya) – Has mortgage options for expatriates meeting specific requirements.
Additionally, some international banks offer property loans for foreign investors:
✔ HSBC Thailand – Specializes in high-net-worth property financing.
✔ UOB Thailand – Provides expat mortgage programs.
✔ ICBC Thailand – Focuses on Chinese and international property buyers.
🔴 Foreigners without Thai income often find it easier to secure loans from offshore banks than Thai banks.
5. Mortgage Loan Terms and Conditions in Thailand
5.1 Loan-to-Value (LTV) Ratio
✔ Thai nationals: 80%–90% LTV (can finance up to 90% of the property value).
✔ Foreigners: 50%–70% LTV (higher down payments required).
5.2 Interest Rates for Mortgages in Thailand
✔ Fixed Interest Rates: 3%–5% for the first 3 years.
✔ Floating Interest Rates: MLR (Minimum Lending Rate) + 1% to 3%, adjusted annually.
✔ Mortgage rates are reviewed annually by the Bank of Thailand.
5.3 Loan Repayment Terms
✔ Mortgage repayment periods range from 10 to 30 years.
✔ Most banks require borrowers to be under 60 years old at loan maturity.
✔ Monthly installment payments must not exceed 40% of the borrower’s income.
6. Steps to Apply for a Property Mortgage in Thailand
Step 1: Loan Pre-Approval
✔ Thai and foreign buyers must submit:
-
Income proof (salary, tax returns, or business financials).
-
Work permit or residency status (for foreigners).
-
Property sale agreement.
Step 2: Property Valuation and Loan Offer
✔ The bank conducts a property appraisal.
✔ If approved, the bank issues a formal loan offer letter.
Step 3: Mortgage Agreement Signing
✔ Both parties sign a mortgage contract at the Land Office.
✔ The bank registers the mortgage on the property title deed as collateral.
Step 4: Fund Disbursement & Property Transfer
✔ Once the mortgage is registered, the funds are disbursed to the seller.
✔ The buyer receives ownership, subject to the mortgage lien.
7. Mortgage Foreclosure and Legal Implications
If a borrower fails to make mortgage payments, the bank may foreclose on the property under Thai law.
✔ After 3–6 months of missed payments, banks issue default notices.
✔ If unresolved, the lender files for court foreclosure.
✔ The property is auctioned to recover the outstanding loan balance.
🔴 Borrowers can avoid foreclosure by negotiating loan restructuring or settlement with the bank.
8. Alternatives to Mortgages for Foreigners
Since mortgage options for foreigners are limited, alternative financing options include:
✔ Developer Financing – Some real estate developers offer installment payment plans.
✔ Offshore Loans – Foreign banks in Hong Kong, Singapore, and Europe provide real estate financing for Thailand-based properties.
✔ Thai Company Ownership – Foreigners can purchase property through a Thai company and use it to secure a mortgage.
🔴 Legal Warning: Using a nominee Thai company to own land or secure a mortgage is illegal if the Thai shareholders do not have real financial involvement.
9. Conclusion
Property mortgages in Thailand are widely available for Thai nationals but restricted for foreigners. While some banks offer condo mortgages to expatriates, landed property financing is generally unavailable to foreign buyers. Understanding loan terms, eligibility requirements, and legal restrictions is essential for anyone considering property financing in Thailand.
Foreigners seeking mortgages should explore developer financing, offshore loans, or structured financing options to acquire property legally and efficiently in Thailand.