Expat Mortgage: Cost per Million

[corkman]

Hi All,

 

I'm not looking for a penny perfect quote. Roughly speaking, assuming a 30% deposit and 70% loan, what will be the cost per million baht over say 10 and 15 yrs? Roughly what is the interest.

 

For what it is worth, I'm looking to buy a condo on the 7-10MB range, in Bangkok. So borrow 5-7MB, something like that. I have a work permit etc. 

 

I've tried googling this, but come back with such a wide range of answers it's hard to tell what is what.

 

Thanks in advance.

[tomazbodner]

Usually property listing sites have a calculator at the bottom. I know ddproperty and hipflat do. But of course, you'd need to check with the banks what they offer, if at all to foreigners. All their websites state Thai national only, but talking to bank staff the story changes. There's one site that's for foreigners, MBK, but they are very expensive and cover very little.

 

https://www.mbkg.co.th/en/loan_products/condo_loan/about

 

I think you'd need to talk to Krungsri or Kasikorn or SCB. Beware though that these banks are getting ever worse affected by bad loans and have severely restricted borrowing, so don't be surprised if you're rejected.

 

Last thing - I assume you have permanent residence in Thailand. If not, you're limited to taking a loan in the Thai name or to Bangkok Bank and UOB, where loan would actually be in Singapore Dollars, with much higher interest than for Thais. The reason is that if you don't have PR (or are a Thai) you need to transfer all the purchase amount in from overseas by a bank transaction to get some green paper that allows you to buy it in your own name. BKK Bank and UOB would issue a loan in Singapore and then transfer amount in your name to Thailand, so you have that receipt.

 

https://senseproperty.com/financing-for-foreigners#anchor-withincomeinthailand

 

Note though that last I heard of it, it was 10 million baht up, interest between 7 and 10% per annum, and had to be repaid in 5-10 years. Haven't seen anything on their websites, though honestly I wasn't really looking for it, and don't know anyone who's used such a service.

 

Found this on Google also - it's 3 years outdated so maybe no longer relevant.

 

Financing for Foreigners in Thailand.Article.doc

 

I think I'll stick to buying it with cash.

[uncleP]

Our mortgage with kasikorn is base +4. That's a thai mortgage.

[soi3eddie]

You have the best chance of lower price and interest rate and acceptance if buying off plan or completed project direct from the developer. They are usually supported by a bank and the supporting bank is less restrictive on and keener to get the capital asset off the books onto a loan agreement. Used condos are very difficult to finance even for Thais. There are some big (not necessarily good value) discounts available - see below). Bargain hard on new builds and you may get a bargain - some developers are desperate right now. It's a buyer's market so don't hurry. Good luck and let us know how you get on.

 

Edited August 11, 2020 by soi3eddie

[Airalee]

1 hour ago, tomazbodner said:

Usually property listing sites have a calculator at the bottom. I know ddproperty and hipflat do. But of course, you'd need to check with the banks what they offer, if at all to foreigners. All their websites state Thai national only, but talking to bank staff the story changes. There's one site that's for foreigners, MBK, but they are very expensive and cover very little.

 

https://www.mbkg.co.th/en/loan_products/condo_loan/about

 

I think you'd need to talk to Krungsri or Kasikorn or SCB. Beware though that these banks are getting ever worse affected by bad loans and have severely restricted borrowing, so don't be surprised if you're rejected.

 

Last thing - I assume you have permanent residence in Thailand. If not, you're limited to taking a loan in the Thai name or to Bangkok Bank and UOB, where loan would actually be in Singapore Dollars, with much higher interest than for Thais. The reason is that if you don't have PR (or are a Thai) you need to transfer all the purchase amount in from overseas by a bank transaction to get some green paper that allows you to buy it in your own name. BKK Bank and UOB would issue a loan in Singapore and then transfer amount in your name to Thailand, so you have that receipt.

 

https://senseproperty.com/financing-for-foreigners#anchor-withincomeinthailand

 

Note though that last I heard of it, it was 10 million baht up, interest between 7 and 10% per annum, and had to be repaid in 5-10 years. Haven't seen anything on their websites, though honestly I wasn't really looking for it, and don't know anyone who's used such a service.

 

Found this on Google also - it's 3 years outdated so maybe no longer relevant.

 

Financing for Foreigners in Thailand.Article.doc 53.5 kB · 1 download

 

I think I'll stick to buying it with cash.

With terms like that...50% down.  1.25% loan origination fee.  10 year term @ 8.4-8.9%....Sign me up....

 

...To be the lender, of course.  
 

Buy with those terms (when 10 year mortgages in the US are  well under 3%)...no thanks.

 

[corkman]

Thank's for the replies guys. No, I don't have PR but in the process.

 

It's a buyers market at the moment, which is why I am interested. I could scrape together the deposit, and will be keeping on eye on hipflat etc. Although I am interested in used property, not new. The units in the new places are impossibly small and the layouts pretty crappy with very narrow and deep units. The bigger units are impossibly priced. 

 

7-10% interest and 50% down..... I'll stick with renting until I get PR. 

[YT3k72Em]

To buy a condo in your name you need to bring in the total value in foreign currency anyway. So on top of convincing a bank to give you a mortgage then you have to send the money out of Thailand and import it again at additional expense.

Summary of that Word document is No, No, No, Yes..but you would want it, No, and You'd have to be crazy.

[corkman]

Thanks again for everyone's replies.

I ran some numbers using different interest rates from 5% to 7%, over 10 years. Considering rent is so cheap, and it continues to be a buyers / renters market, then if you invested the deposit in the stock market and continued to invest the premium for buying over renting (i.e. the mortgage payment is more than equivalent rent), then at the end of 10yrs the investment would be worth more than the property (assuming 25% increase over 10yrs) and the passive income from the investment would easily cover the rent. When factoring in other costs of ownership (insurance, property fees, future property taxes, maintenance and replacement of kitchens / bathrooms / furniture / maor appliances / etc.), it makes no financial sense to buy. It is cost neutral at best, but more likely cost negative to own versus renting; and highly unlikely to be cost positive.

Ownership is of course more than just financial considerations. There is the emotional comfort (or anguish?) that comes from "owning" your home and the feeling of security and pride that comes with that. The jury is still out on that aspect for me, but at least now I have a feeling for the financial considerations. 
 

[bkk6060]

2 hours ago, corkman said:

Although I am interested in used property, not new. 

Then you have the wrong plan.

Many sellers now are carrying back paper on their properties for up to 10 years at very low interest much lower then banks.  In fact my agent friend told me a seller in Pattaya will carry back for 7 years at zero interest.

Don't go to a bank.  Negotiate the contract/terms hard with the seller and get a much better deal.

Edited August 12, 2020 by bkk6060

[corkman]

1 hour ago, bkk6060 said:

Then you have the wrong plan.

Many sellers now are carrying back paper on their properties for up to 10 years at very low interest much lower then banks.  In fact my agent friend told me a seller in Pattaya will carry back for 7 years at zero interest.

Don't go to a bank.  Negotiate the contract/terms hard with the seller and get a much better deal.

An interesting concept, if I understand correctly. You mean, negotiate a payment plan with owner / developer i.e. say it is 7m then say 2m deposit and 5m × 84 monthly payments @ 59,500 per month. Something like that?

[tomazbodner]

On 8/12/2020 at 2:17 PM, corkman said:

An interesting concept, if I understand correctly. You mean, negotiate a payment plan with owner / developer i.e. say it is 7m then say 2m deposit and 5m × 84 monthly payments @ 59,500 per month. Something like that?

Be careful with that. Property isn't yours until it's fully paid. When loaning from the bank, the bank owns the building until you pay it, with direct deal with seller, the seller owns it until it's fully paid. With bank it's at least expected they'll hand it over at the end without much hassle... but with private seller?

[Leaver]

On 8/11/2020 at 10:19 PM, soi3eddie said:

You have the best chance of lower price and interest rate and acceptance if buying off plan

How many people here have lost their money buying off the plan?  

 

On 8/11/2020 at 10:19 PM, soi3eddie said:

They are usually supported by a bank

In Covid times, who's supporting the bank?

 

On 8/11/2020 at 10:19 PM, soi3eddie said:

There are some big (not necessarily good value) discounts available - see below).

Why not wait for a reset price on the reset price.  ????  It's a sure thing.  

 

On 8/11/2020 at 10:19 PM, soi3eddie said:

Bargain hard on new builds and you may get a bargain - some developers are desperate right now.

So are their banks.  If patient, you can eventually buy it off the bank for cheaper.

 

On 8/11/2020 at 10:19 PM, soi3eddie said:

It's a buyer's market so don't hurry.

Yes, sit back and wait.  The market hasn't bottomed out yet, but it's nearing the cliff face.