Mortgage in Thailand

[baywatch82]

Have anyone have any experience in taking mortgage in thai bank ?

Which bank could have the best offer ?

 

My case :
Want to buy a house for 1.8mln. I can pay 800,000 baht in cash so need to loan 1mln baht.
I am married to Thai. She has job. I have job and work permit. I also own 4 condos on my name.

 

 

[thenewgoo]

I recently tried, a bit more money than your loan request, but similar circumstances.

 

Ultimately (after lots of running around getting letters etc) I was told that because I am not Thai, I cannot get a mortgage. We tried a number of banks. Apparently. I don't have a credit rating - despite paying off a car 100% cleanly. Any mortgage is assessed on my wife's credit. Unfortunately because she has not been working (raising kids) for 3 years, she can't get a mortgage (despite my income). 

 

Very jaded for my future here. Thai banks are rubbish.Good luck,

 

 

[BWPattaya]

I was told by my bank that the Bank of Thailand prohibits mortgages to foreigners.  

Understandable really as foreigners could easily leave the country

Edited August 7, 2017 by BWPattaya
Correct typo

[Falcon]

Best way to get a mortgage for property in thailand used to be through a Singapore based bank. There were a lot of offers a few years ago and it seemed to price quite popular but haven't seen it advertised very much, if at all, over the last couple of years. Maybe phone around and ask about these 'offshore' banks and what they can offer.

[glasswort]

1 hour ago, thenewgoo said:

I recently tried, a bit more money than your loan request, but similar circumstances.

 

Ultimately (after lots of running around getting letters etc) I was told that because I am not Thai, I cannot get a mortgage. We tried a number of banks. Apparently. I don't have a credit rating - despite paying off a car 100% cleanly. Any mortgage is assessed on my wife's credit. Unfortunately because she has not been working (raising kids) for 3 years, she can't get a mortgage (despite my income). 

 

Very jaded for my future here. Thai banks are rubbish.Good luck,

 

 

"Thai banks are rubbish.Good luck,"  An extremely emotive generalisation. I have used the banking system in Thailand for twenty odd years and always found them to be helpful. I needed to take out a mortgage a few years back and although it could not be in my name TMB went out of its way to find a solution. I am married to a Thai lady with no credit rating and she was not earning. She did, however own the house where we were living at the time. The chanote for this property was lodged with the bank and a mortgage on the other property granted to my wife. At the time I had a work permit and paid the monthly amount via a standing order into her mortgage account. Immediately the mortgage was cleared TMB returned the chanote without any problems. Plain sailing really.

[baywatch82]

Sorry for misleading.

I actually want to take mortgage on my wife's name, not mine.

She is working and I am just trying to find out which bank currently offers the best mortgage.

[Bangkokhatter]

My wife got a mortgage based on my salary at the start of this year through Bangkok Bank. She had not been working for over a year due to being pregnant. We could only borrow 90% of the asking price and the loan was for 10 years.

We had been looking to buy for over a year and a friends wife who works in Banking advised us to show movement in the wife's account so when we were renting i paid the rent into her account and she then paid it out.

[spetersen]

You can not get a loan yourself but you can be a guarantor to your Thai wife even if she don't hav an income. We went to Bankok Bank and it was not a problem as long you financial state indicate that you can pay back the mortgage prior to the age of 65. Good Luck

[HTC]

My wife has a mortgage in her name for our place in Samui with UOB  (Phuket branch). She is not working and I am the guarenteur. So as other people mention, it is possible.

[nsimmons]

Hi All,

 

When living in Japan, m wife and I teaching English we wanted to buy http://perthcondos.com/

in Perth Australia. The Assie banks didn't want to know although income was good and they get a 1st mortgage anyway.

Finally a Singapore bank was happy to loan us 80% we paid 20% deposit, and all went well.

I would search with Google Singapore banks, sorry I can't remember their name. I also remember that when we moved back 5 yrs later  we had to cancel the Singapore loan and get an Aussie one, n idea why.

Also  the main reason you can't borrow against Thai property is that due to past corruption nobody is sure who owns what and

if the title is legal or you are on the land you are supposed to be and not a meter into a National Park etc

 

NS

[davidst01]

Of course a thai bank will be reluctant to lend to a foreigner based on the fact that we can only own condos in our name. Little do they realise that we would be more reliable regarding monthly payments than most thais

[VegasExpat]

 

As a foreigner tried to get a mortgage several years ago but certain conditions

a) can only get mortgage on the building not the property that it sits on

 mortgage term is  60 years left you age so if you are 50 term is 10  only years c) if get in wife's name and she dies then you cannot be the beneficiary so property goes to her relatives in a pre-determinded order; children (any from anyone) parents, siblings and so on.  So I rent but would consider a condo but other hassles there

[TerryLH]

"...if get in wife's name and she dies then you cannot be the beneficiary so property goes to her relatives in a pre-determinded order; children (any from anyone) parents, siblings and so on."

 

I don't think that's true.  You can be left the property, but you can't keep it.  I believe you have one year to sell it.

[bbz404]

My wife and I just got approved our mortgage with BBL for a house in Rayong. It's in her name, she is currently at home and I have been working in Thailand legitimately for over 2 years. 

BBL was actually the only bank that was not scared of talking to a foreigner-thai couple. We have tried a couple of the other banks (SCB, Krungsri, KBank) but it was clear that they were reluctant. I'm still waiting on UOB to give me their rates. 

What I found was that compared to a car loan, housing loans are handled very amateur-like. There are no experts or banking agents working only on housing loans and who could go through with you on all the details. They are merely collecting information and forwarding it to the HQ who will maybe call once or twice and then unilaterally make a decision on the loan amount and interest rates to be granted. With my car loan, the bank guy came to my house and filled out the paperwork and handled everything super smoothly. I didn't have to go to the bank once and for that they only make 28K in interest! Why they don't put more effort into the housing loan service is a mystery to me. 

Also, we got approved based on my income as a guarantor which, had I been Thai, would have allowed me to benefit from the much lower High-Income Earner interest rates. But now, just because of my foreign citizenship, we're being discriminated against by having to pay the normal rates assessed on my wife only (who doesn't work). Our offer from BBL is for 10 years but I intend to pay back the whole mortgage within 3 years anyway, so the interest rate hike bothers me, but only to a certain extent.

[baywatch82]

Great, thank you everyone for help. I will visit UOB this weekend and BBL. After reading your cases I am optimistic about it.

[thenewgoo]

On 8/7/2017 at 8:40 PM, glasswort said:

"Thai banks are rubbish.Good luck,"  An extremely emotive generalisation. I have used the banking system in Thailand for twenty odd years and always found them to be helpful. I needed to take out a mortgage a few years back and although it could not be in my name TMB went out of its way to find a solution. I am married to a Thai lady with no credit rating and she was not earning. She did, however own the house where we were living at the time. The chanote for this property was lodged with the bank and a mortgage on the other property granted to my wife. At the time I had a work permit and paid the monthly amount via a standing order into her mortgage account. Immediately the mortgage was cleared TMB returned the chanote without any problems. Plain sailing really.

I do grant it was emotive sure -  I guess as a first time home buyer who doesn't have a wife with a job and/or other property as collateral  my situation is slightly different to yours and a few others. Some people have had success, lucky them. We were assured the 90% deal by 2 different banks but HQ vetoed it. There doesn't seem to be any consistency among banks. Right now, foreigners (without a Thai wife with an income/collateral ) are off limits for approvals. Cash is king. I maintain that Thai Banks are rubbish.

[cortez]

A bit late to the topic... My wife and I were approved for a mortgage this year with UOB. We did it the same way you want to do it, in my wife's name and me being the guarantor.  It shouldn't be a problem for you.

[fletchsmile]

We've done this twice:

1) A decade or so back while I was working in Thailand with WP and wife not. Loan to Thai wife guaranteed by me.

2) Recently, neither of us working, although she is director of a couple of companies here. The bank advanced a surrogate loan, 30 year tenor, based on the investments and cash my wife held at the bank, and using them as a basis to calculate her debt service ratio (DSR). Obviously helps we have a very good relationship with the bank, are Priority Banking clients, and a good credit history

 

Should add we've had mixed experience and failures with other banks, from no starter at the offset, to collecting all the info and coming back saying I don't have a WP, or they don't want to lend to my wife as she didn't have earned income etc.

 

Cheers

Fletch :)

Edited August 9, 2017 by fletchsmile

[Kieranmc]

We have just secured a mortgage from UOB last week for a house for 4.2 million THB. My wife is a house wife as such and her credit in fairness is not anything to write home about due to a few mistakes in the past like we all have made.

 

The loan will be in both our names but the property of course in my wife's name as I cannot legally own land. No issue for me. We want a house and this is how it must be done.

 

From me they wanted work permit (I have worked for the same company for the last 5 years) - tax returns (very important), Copies of passport etc, income guarantee from said company, marriage certificate etc. They ran my credit and all came back good. I do have a credit score here as I have two unsecured credit cards and a car loan - no issues whatsoever.

 

So now we are just waiting to finish of the process and move into our new home.

[bbz404]

17 hours ago, Kieranmc said:

We have just secured a mortgage from UOB last week for a house for 4.2 million THB. My wife is a house wife as such and her credit in fairness is not anything to write home about due to a few mistakes in the past like we all have made.

 

The loan will be in both our names but the property of course in my wife's name as I cannot legally own land. No issue for me. We want a house and this is how it must be done.

 

From me they wanted work permit (I have worked for the same company for the last 5 years) - tax returns (very important), Copies of passport etc, income guarantee from said company, marriage certificate etc. They ran my credit and all came back good. I do have a credit score here as I have two unsecured credit cards and a car loan - no issues whatsoever.

 

So now we are just waiting to finish of the process and move into our new home.

 

Interesting. For me the experience was similar. Except that the bank guy said I would get the high income interest rate of around 3.65% effective but in the end it turned out they could only give the normal rate as I am a foreigner. Now we'll be around 5.4%. May I ask which interest rate you got approximately?

 

[fletchsmile]

1 hour ago, bbz404 said:

 

Interesting. For me the experience was similar. Except that the bank guy said I would get the high income interest rate of around 3.65% effective but in the end it turned out they could only give the normal rate as I am a foreigner. Now we'll be around 5.4%. May I ask which interest rate you got approximately?

 

For the twice we've got a mortgage being a foreigner has made no difference to the rate.

 

For the mortgage we got a couple of months back in June 2017, we got a discounted rate for the first 3 years. Based on the current MHR rate, it works out:

 

Yr1 = 2.73% (MHR - 4.25%)

Yr 2-3 = 3.73% (MHR - 3.25%)
Yr 4+ = 4.98% (MHR -2%)

 

Highly likely after end of the 3 year discount period, we'll either pay it off completely, reduce significantly or refinance to get a better rate.

[Golden Triangle]

I'd be interested to know what the 'average' monthly repayment on a 2 - 3 mill Baht loan might be, I have rented for the last 6 years and fancy moving to another province where property prices are likely to be lower than Pattaya, I'm not married to my Mrs (thinking about it) and the loan would have to be in her name probably with me as guarantor.

 

Any rough estimates would be welcome. 

[bbz404]

36 minutes ago, Golden Triangle said:

I'd be interested to know what the 'average' monthly repayment on a 2 - 3 mill Baht loan might be, I have rented for the last 6 years and fancy moving to another province where property prices are likely to be lower than Pattaya, I'm not married to my Mrs (thinking about it) and the loan would have to be in her name probably with me as guarantor.

 

Any rough estimates would be welcome. 

That depends very much on the length of the loan obviously. 

For our 2M baht for 10 years the monthly installment is around 23k

but I can pay more whenever I want and it reduces the principal balance on which the interest is calculated; unlike the flat rate car leasing loans. 

Hope that clarifies. 

[baywatch82]

Just been approved mortgage at Government Savings Bank.
Together with Thai wife, we both work in Thailand.

[blackcab]

@baywatch82 what terms did you get please?

 

How did you find dealing with GSB?

[fletchsmile]

On 10/5/2017 at 2:01 PM, bbz404 said:

That depends very much on the length of the loan obviously. 

For our 2M baht for 10 years the monthly installment is around 23k

but I can pay more whenever I want and it reduces the principal balance on which the interest is calculated; unlike the flat rate car leasing loans. 

Hope that clarifies. 

Most Thai bank mortgages will let you overpay and reduce the principal if you want. This will in turn reduce your interest payments as they are usually calculated based on the daily principal outstanding multiplied by the current interest rate for your mortgage. 

 

Standard Chartered - now Tisco - are the only one I'm aware of that will let you withdraw the over-payments again + offset the balance on your deposit account.

 

You can overpay/offset up to 50% of the outstanding principal on your loan into the deposit account. So if you had say 2M loan, you put 1M in the deposit account and pay interest only on 1M. Should you want to withdraw the money again you can do any time. This is great for saving interest and a highly flexible credit facility. Any over-payment above 50% of the outstanding is permanent like other Thai banks.

 

Cheers

Fletch :)

Edited October 10, 2017 by fletchsmile

[baywatch82]

On 10/10/2017 at 2:48 PM, blackcab said:

@baywatch82 what terms did you get please?

 

How did you find dealing with GSB?

I am not really aware on all terms to be honest. Wife was mostly dealing with it and she assured me that usually GSB is the best possible. However, I will not be surprised if other banks have better deals really, I think she didn't do much research, but I couldn't be bothered.

All I know is that I took 1.5mln baht for 5 years. We bought a house for 2.5mln, I offered 1mln downpayment in cash.
I will need to pay each month 29,900 baht.
60 x 29,000 baht = 1,794,000 baht
So that means I need to give to the bank 294,000 baht in 5 years for this credit. Such a good business they make.
Also ... I need to buy a fire insurance for this house for 5 years that cost around 7000 baht.
Another 15,000 baht needed to pay some mortgage fee at the land office. Also paid taxes 50/50 with the owner.

 

Does it sound about right, or we made a big mistake ?
 

Edited October 13, 2017 by baywatch82

[fletchsmile]

On 10/13/2017 at 9:11 PM, baywatch82 said:

I am not really aware on all terms to be honest. Wife was mostly dealing with it and she assured me that usually GSB is the best possible. However, I will not be surprised if other banks have better deals really, I think she didn't do much research, but I couldn't be bothered.

All I know is that I took 1.5mln baht for 5 years. We bought a house for 2.5mln, I offered 1mln downpayment in cash.
I will need to pay each month 29,900 baht.
60 x 29,000 baht = 1,794,000 baht
So that means I need to give to the bank 294,000 baht in 5 years for this credit. Such a good business they make.
Also ... I need to buy a fire insurance for this house for 5 years that cost around 7000 baht.
Another 15,000 baht needed to pay some mortgage fee at the land office. Also paid taxes 50/50 with the owner.

 

Does it sound about right, or we made a big mistake ?
 

Needing to buy fire insurance is common. The twice we've been had mortgages we bought 3 years. After that it's your call whether to extend or not. Makes sense for the bank and for you. I guess in your case as it was only a couple of more years for your full 5 years, so they requested that.

 

Mortgage fee at the land office is normal and your 15k is right. It is usually 1% of the mortgage to register the charge over your assets at the land office.

 

Just plugged in your numbers on my iPad app to check the rate as I thought it looks high. Comes out at 7.28% for 5 years at 29,900 on 1.5mn. 

 

Definitely not the "usual best possible" rate around as your wife assured you LOL Looks more like a higher than average standard rate without any form of promotion on or discount. Still, on the short term and amount you have, it's not going to get out of hand. 5% on your term for example would have been around 28,307 a month, and around 96k over your term

 

After the 3 year promotional period and discounted rates, ours is MHR -2%, which worked out as 4.98%. The MHR used by our bank is an average of 4 other big banks. The +/- added depends on you, your application, mortgage type, term etc.

 

 

 

 

[baywatch82]

22 hours ago, fletchsmile said:

 

Just plugged in your numbers on my iPad app to check the rate as I thought it looks high. Comes out at 7.28% for 5 years at 29,900 on 1.5mn. 

Thanks for your comments.
How did you calculate this ?

My calculating way was a bit different :

1.5mln + 20% = 1.8mln (very close to mine 1.794mln I need to pay 60x29,900)
20% in 5 years, means around 4% per year, which sounds alright.

[fletchsmile]

What you need to bear in mind though is that your full 1.5mn is not outstanding all the time.

 

At the start you're paying interest on 1.5mn, but just before your final payment you have only 29,900 outstanding, and are paying interest on only 29,900 not the full 1.5mn at the start.

 

If you split it into 60 payments:

1st will have interest on 1.5mn. Which is approx 1.5mn x 7.28%/12 = 9,100 interest. So 9,100 is interest and 20,800 is capital

2nd will have interest on  1.5mn - 20,800 or 1,479,200. So 1,479,200 x 7.28%/12 

= 8,973. So 8,974 is interest and 20,926 is capital

 

etc etc

 

7.28% is the approx rate that brings it all to zero after 60 months. The actual interest balance is calculated on actual number of days in the month/365 rather than dividing by 12 as above, but gives an idea.

 

I actually just plugged it into the mortgage calculator in the numbers app on my ipad, but that's essentially what it is doing.

 

Another way to think about it is very crudely you will on average have something like half the balance outstanding as you have the full amount at the start and zero at the end. Hence the effective rate is approx double your 4% estimate. That is a very crude estimate though 

 

The way you have calculated 4% is actually the way they quote for car loans in Thailand. The effective rate is always higher though as you don't have the full amount outstanding for the whole period.

 

As said, it's not a great rate to be honest, but given your short period of only 5 years, and that you presumably wanted finance in the first place, not something to get hung up on. Main thing is you're comfortable with it and the repayments.

 

Cheers

Fletch :)