The Home Loan Process and Requirements in Thailand

Many foreigners dream of buying property for sale in Pattaya, Thailand. They’ve visited and fallen in love with the Thai culture, the scenery, and the lifestyle. Some have even gotten a job in a Thailand-based company and have relocated. However, even with the lower property costs in Thailand, most still need a home loan before they can even think about becoming a property owner. 

We’ll explain the criteria and eligibility requirements for foreigners looking to get a home loan from a lending institution in Thailand. Knowing these requirements can help you plan for a long-term or permanent residency in Thailand. 

Meeting the Requirements for a Home Loan

The property laws for most foreigners buying homes in Thailand stipulate that the funds used for the purchase must be brought into Thailand from overseas. However, some loopholes allow foreigners to buy property using local currency. Foreigners with a valid residency visa can use funds from home loans from a Thai lending institution.

But before you can apply for a home loan in Thailand, you must qualify under one of four categories. The categories are:

• Holding Thai permanent resident status (PR). 
• Having dual Thai and foreign citizenship. 
• Having a Thai spouse. You’ll be able to apply for a home loan by acting as the guarantor of the loan. However, you won't have ownership rights to the property. 
• Working under a work permit for at least a year or two with a stable income. 

Once you’ve qualified to apply for a home loan, most lending institutions in Thailand stipulate further mandatory conditions under the home loan process that may vary depending on the institution. They can include:

• An applicant must be between 21 and 55 years old and not exceed age 60 by the end of the loan’s payment terms.
• Applicants must possess a good credit score and a minimum income of at least THB 80,000 – 140,000 monthly.
• The property must be a completed project within selected areas in Thailand.
• The loan duration is generally capped at 15 years, although some banks offer as much as 30 years.
• You can expect a maximum loan-to-value (LTV) rate of 60-70%. This means you’ll need to offer a down payment between 30-40%.

When you’ve been approved for a home loan, your lending institution will issue a home loan document with the agreed-upon terms. This document should be carefully checked for accuracy before signing and then kept in a secure place. 

Condo Ownership

One of the first things you may have learned when you first started investigating the property market in Thailand is that foreigners cannot legally own a free-standing home or vacant piece of land in Thailand. They can only legally own a condo unit in a condo complex with at least 51% Thai ownership. Once the Thai ownership quota in a condo complex has been reached, the remaining units in the complex are free to be sold to foreigners. 

Foreigners owning a condo under freehold ownership have the right to vote as juristic persons in committee meetings regarding the management of the building. They also have the right to resell or rent out their unit. 

Leasehold Property

One way foreigners can legally reside in free-standing homes is by leasing the property under a leasehold arrangement. Under Thai laws, the maximum allowed term of a leasehold is 30 years, with an option to renew for another 30 years. Leasehold terms generally offer lower monthly payments than rental agreements.

Leasehold conditions can generally be negotiated and included in the leasehold document. These conditions can cover repairs, upgrades, and the primary tenant's subletting of the home. 

Setting Up a Thai Company

There is another way to own a property in Thailand, although it falls into a legal gray area and is not recommended by Pearl Property Pattaya, the Thai government, or the land offices handling overseas property and fund transfers. 

Foreigners can set up a Thai company for the purpose of land acquisitions. For the company to be considered a “Thai Entity” and able to own property, at least 51% of the company must be owned by Thai citizens. The 51% are generally made up of “Thai nominee shareholders,” who are actually fake investors paid a set fee for the use of their name.  

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