Are you looking to buy property in Thailand?
Unless you have the necessary cash flow, the thorny issue of financing arises.
Discover in this article the different solutions for financing the purchase of real estate in Thailand , depending on your situation and needs.
Buying real estate in Thailand
With very attractive prices, quality services, rental guarantees and the possibility of benefiting from a profitable and secure investment, foreigners do not hesitate to invest in Thailand.
Among the opportunities to seize, you can make a purely rental investment, buy a house or apartment as a second home or even consider a mixed use (holiday and rental for a period of the year when you are away).
To finance the purchase of this property , you should know that neither Thai nor French banks will be inclined to grant you a mortgage for the acquisition of this property.
Therefore, other avenues must be explored to acquire real estate in Thailand.
Financing your property purchase in Thailand with a Thai bank
Thai banks are not in favor of granting loans to foreigners for their real estate purchases in Thailand.
Applications from foreigners are rarely accepted (married to a Thai national, resident for many years, high income…).
There are many restrictions, and the loan is rarely advantageous. But don't regret it. Indeed, Thai banks charge rates around 8%, significantly higher than foreign or French banks.
It is definitely better to look into other banking institutions.
Financing your property in Thailand with a French bank
French banks do not usually grant mortgage loans for properties located abroad.
However, some financing solutions are available. Banks will be more willing to lend if you provide a down payment, demonstrate sufficient income, and offer your assets as collateral to guarantee repayments.
If you own real estate in France, French banks may be able to guide you towards financing through asset mobilization or transferred mortgages.
These banking mechanisms aim to grant a conventional loan by using your French assets as collateral, whether movable (life insurance, shares, company shares…) or immovable (land, house, apartment).
The mobilization of heritage :
Offered to French people who already have assets in France, this commitment facilitates obtaining a loan, provided that the criteria of age, income and debt are met.
The mortgage moved :
This involves refinancing a property that you already own. This measure offers a standard amortizing loan over a period of 3 to 20 years, for an amount of up to €1 million. The conditions will be standard: income, debt-to-income ratio, maximum age of 65 at the end of the loan, mortgage, etc.
With this loan from a French bank, you'll have the guarantee of a euro-denominated loan that won't be affected by exchange rate fluctuations, as well as a favorable interest rate. This will allow you to purchase property in Thailand with complete peace of mind.
If you have no assets in France and the amount borrowed is less than €70,000, your bank may offer you a personal consumer loan to be repaid over 5 years.
The interest rate will be slightly higher, but it remains a financing solution not to be overlooked for the acquisition of property in Thailand.
Some banks may require collateral, such as a bank guarantee on your funds . In this case, the investor agrees to deposit an amount equivalent to the loan into their bank account. This sum is returned at the end of the contract.
Don't hesitate to contact your bank advisor to consider all the solutions and find the arrangement that best suits your situation.
Financing your property in Thailand with a foreign bank
In the Thai banking landscape, a solution facilitates financing for real estate purchases for resident expatriates and investors.
Don't hesitate to approach foreign banks operating in the country. French banks also have a presence in Thailand.
United Overseas Bank (UOB) is a Singaporean bank that offers a range of solutions for purchasing property in Thailand. You can take out a loan in Singapore Dollars or US Dollars for up to 35 million baht.
UOB can finance up to 70% of the purchase price if you are a resident and 60% if you are a non-resident. Interest rates are 3 points lower than those of Thai banks. However, strict loan conditions must be met to finalize the loan:
- The borrower must be between 21 and 65 years old.
- His income must amount to 140,000 THB if he works in Thailand and 190,000 THB if he works abroad.
- Only freehold condominiums can be purchased.
- The property must be located in one of the following areas: Bangkok, Phuket, Pattaya, Chiang Mai, Koh Samui, Hua Hin and Cha-Am.
- The loan term cannot exceed 30 years.
- The amount to be financed ranges from 2 million THB to 50 million THB
Also present in the Thai banking market, ICBC , a Chinese bank, assists foreigners with their real estate purchases in Thailand, even if they are not residents.
A loan with a maximum term of 10 to 15 years will be obtained from the subsidiary in Singapore, in Singapore Dollars. To qualify for this loan, you will need to demonstrate employment, substantial income, and a very low debt-to-income ratio.
Excellent opportunities remain in Thailand, offering attractive returns and favorable tax treatment. There are numerous financing options available for your real estate investment, depending on your individual circumstances.
Take the time to discuss this thoroughly with your bank advisor to find the most suitable solution.
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