When it comes to buying property in Thailand, many people wonder if it is possible for a foreigner to get a mortgage. The short answer is that it is possible, but not always. In practice, most foreigners have to look for other options. Let's tell you why.
Why is a mortgage in Thailand almost inaccessible to foreigners
In Thailand, banks are cautious about lending to non–residents, but for local residents, a mortgage loan is a common way to buy a home. A foreign passport holder can buy an apartment or villa in Thailand with a mortgage, but this requires:
- official employment in Thailand;
- work visa and work permit;
- income confirmed by a Thai employer;
- tax history within the country;
- long stay in the Kingdom and stable status.
Some banks are launching mortgage lending programs for non-residents, but the conditions there are far from the usual understanding: short terms, high initial payment, the rate is higher than for Thais. Therefore, most people who invest in buying real estate in Phuket, Bangkok, Pattaya or other regions do not expect a mortgage.
Installment plan: a working tool that everyone uses
Instead of mortgages for foreigners who decide to buy an apartment in Thailand, another mechanism is used – installments from the developer. This is not exactly a banking product, so it does not require confirmation or employment in the Kingdom. An installment plan for the purchase of real estate in Thailand is a common scheme for buying housing on the primary market, where payment is divided into the construction period.
It usually looks like this:
- 20-30 % the buyer pays out of the amount upon signing the contract;
- the remaining part is distributed in equal installments during construction.
It is important to understand that ownership is issued after full payment. If the project has been under construction for 2-3 years, the payment burden is distributed quite comfortably.
In addition, some complexes have a "post-handover" installment plan: part of the amount is paid after receiving the keys. This option is quickly dismantled, because it is as similar as possible to a mortgage, only without the participation of a bank.
Why installments are a great payment option for investors
Firstly, this payment method closes the issue of entering into a transaction: you do not need to confirm income, apply for a work visa, or go to the bank with documents. Secondly, the longer the construction period, the softer the payment schedule. For many, this is a way to enter a more expensive project and not withdraw a large amount immediately. Thirdly, the scheme is transparent. You pay according to the contract, and after the construction is completed, you receive ownership rights. This is an absolutely normal practice in the Thai market, and this is how 90% of foreign investors buy.
