Mortgage in Thailand

[BaanOz]

I am just looking into this myself and the Government Savings Bank home loan details are below. Worked out that Type 1 will be a little cheaper but Type 2 is a fixed rate for 3 years.

https://www.gsb.or.th/personal/products/loan/person/domestic.aspx

The MRR is 7%

 

For Housing Loan
Type 1

• Interest rate of 1.25 % per year in the first year
• Interest rate of MRR - 2.00 per year in 2nd year
• Interest rate of MRR - 0.75 per year in 3rd onwards (maturity loan agreement)

Type 2

• Interest rate at 4.50% per year in the year 1-3.
• interest rate of MRR - 0.75 per year in 4th years onwards (maturity loan agreement).

Edited October 25, 2017 by BaanOz

[BaanOz]

On 17/10/2017 at 12:55 PM, baywatch82 said:

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.

There is a really good calculator here where you can plug in interest rates each year: https://www.thailand-property.com/loan-calculator

For the GSB interst rates above for a 1500000Baht loan over 5 years:

Type 1

Loan terms 60

Total payment ฿ 1,741,912

Total interest paid ฿ 241,912

Type 2

Loan terms 60

Total payment ฿ 1,743,351

Total interest paid ฿ 243,351

 

Edited October 25, 2017 by BaanOz

[sky3]

Hi, can anyone confirm or have details of a successful case of getting an offshore mortgage through UOB? I'd like to get a mortgage loan in my own name to buy a condo (looking at places around THB 5 million). I have been in Thailand for approximately 1 year, have a permanent job here and work permit and salary around THB 2 million per year all in. I've tried going to Citibank and SCB so far (just because I have credit cards and regular accounts with them) to inquire about mortgage / loans in general and almost before the words could come out of my mouth I was told "No foreigner cannot". Looking for alternatives at the moment but having done some research online and reading through threads like this it seems that its quite impossible.... someone pointed me the direction of financing firms like MBK but the rates are ridiculous at 10-12%, definitely not going to be doing that.

 

Any insight would be appreciated, sorry for the long post!

[YT3k72Em]

1 hour ago, sky3 said:

Hi, can anyone confirm or have details of a successful case of getting an offshore mortgage through UOB? I'd like to get a mortgage loan in my own name to buy a condo (looking at places around THB 5 million). I have been in Thailand for approximately 1 year, have a permanent job here and work permit and salary around THB 2 million per year all in. I've tried going to Citibank and SCB so far (just because I have credit cards and regular accounts with them) to inquire about mortgage / loans in general and almost before the words could come out of my mouth I was told "No foreigner cannot". Looking for alternatives at the moment but having done some research online and reading through threads like this it seems that its quite impossible.... someone pointed me the direction of financing firms like MBK but the rates are ridiculous at 10-12%, definitely not going to be doing that.

 

Any insight would be appreciated, sorry for the long post!

Condos must be paid with foreign currency transferred into Thailand, so I don't think that's going to work.

[fletchsmile]

On 11/24/2017 at 3:33 PM, sky3 said:

Hi, can anyone confirm or have details of a successful case of getting an offshore mortgage through UOB? I'd like to get a mortgage loan in my own name to buy a condo (looking at places around THB 5 million). I have been in Thailand for approximately 1 year, have a permanent job here and work permit and salary around THB 2 million per year all in. I've tried going to Citibank and SCB so far (just because I have credit cards and regular accounts with them) to inquire about mortgage / loans in general and almost before the words could come out of my mouth I was told "No foreigner cannot". Looking for alternatives at the moment but having done some research online and reading through threads like this it seems that its quite impossible.... someone pointed me the direction of financing firms like MBK but the rates are ridiculous at 10-12%, definitely not going to be doing that.

 

Any insight would be appreciated, sorry for the long post!

As you're looking for alternatives: We got a "secured wealth lending facility - overdraft financing" from StanChart Singapore. It wasn't a mortgage per say, but you can use the facility for whatever you want. We simply drew against the facility and transferred the money to Thailand.

 

Key points:

- You need to be at least a Priority banking client. So that's at least SGD 200,00 of assets with them (approx THB 5mn)

- We borrowed against "qualifying assets" we hold with them. In our case these were initially unit trusts/mutual funds, Blue Chip shares on US and European stock markets and Singapore REITs. They didn't accept ETFs or Investment trusts and not all unit trusts/ shares /REITs qualify. Generally, if they qualify we could borrow 60%-70% of market value of the assets, i.e 60%/70% loan to value (LTV). So if you have say SGD 400,000 of qualifying investments was relatively easy to get a SGD 200,000 borrowing facility against it. (That's only 50% but they like to see a buffer, and I preferred having one - as otherwise if the value of your investments falls you may end up with your LTV being too high and get a call to top up the funds or pay down some of the loan)

- They effectively take a "lien" over your investments so you can't sell them. However, you can ask them to change the assets and pledge different assets/ swap them at any time. So you can then sell them and just replace by others

- You can draw against the facility at any time up to your limit, and pay back at any time. Basically like a secured overdraft

- Cost of financing is Sibor + a few basis points. It works out about 2% at the moment (annualised SGD rate)

- In our case the dividend yield of the investment portfolio is higher than the cost of financing, so the dividends more than cover the interest

 

Would just add, neither of us are Singaporean, nor live in Singapore. My wife is Thai and we live in Thailand. They don't look at your income level at all, nor the purpose of the borrowing. They simply look at your banking relationship with them, and the value of your investments, then use them as security against the borrowing if they qualify.

 

Cheers

Fletch :)

Edited November 27, 2017 by fletchsmile

[sky3]

On 11/27/2017 at 10:46 AM, fletchsmile said:

As you're looking for alternatives: We got a "secured wealth lending facility - overdraft financing" from StanChart Singapore. It wasn't a mortgage per say, but you can use the facility for whatever you want. We simply drew against the facility and transferred the money to Thailand.

 

Key points:

- You need to be at least a Priority banking client. So that's at least SGD 200,00 of assets with them (approx THB 5mn)

- We borrowed against "qualifying assets" we hold with them. In our case these were initially unit trusts/mutual funds, Blue Chip shares on US and European stock markets and Singapore REITs. They didn't accept ETFs or Investment trusts and not all unit trusts/ shares /REITs qualify. Generally, if they qualify we could borrow 60%-70% of market value of the assets, i.e 60%/70% loan to value (LTV). So if you have say SGD 400,000 of qualifying investments was relatively easy to get a SGD 200,000 borrowing facility against it. (That's only 50% but they like to see a buffer, and I preferred having one - as otherwise if the value of your investments falls you may end up with your LTV being too high and get a call to top up the funds or pay down some of the loan)

- They effectively take a "lien" over your investments so you can't sell them. However, you can ask them to change the assets and pledge different assets/ swap them at any time. So you can then sell them and just replace by others

- You can draw against the facility at any time up to your limit, and pay back at any time. Basically like a secured overdraft

- Cost of financing is Sibor + a few basis points. It works out about 2% at the moment (annualised SGD rate)

- In our case the dividend yield of the investment portfolio is higher than the cost of financing, so the dividends more than cover the interest

 

Would just add, neither of us are Singaporean, nor live in Singapore. My wife is Thai and we live in Thailand. They don't look at your income level at all, nor the purpose of the borrowing. They simply look at your banking relationship with them, and the value of your investments, then use them as security against the borrowing if they qualify.

 

Cheers

Fletch :)

Cheers Fletch, I'll definitely look into that thanks!

 

An update: I called UOB to inquire about local mortgage loan and they said I could only apply for one if I fulfilled 1 of the 3 following criteria:

- have Thai citizenship/nationality

- married to Thai person

- have a child with a Thai person (does not have to be married with this person)

 

The agent on the phone was apologetic and then he told me he will refer to another loans department where they deal with offshore lending. He said someone from that department will contact me by email or phone directly but still waiting about a week already.

 

I will probably just end up borrowing from a line of credit in Canada where the interest rate is about 3.2% currently if I remember correctly...

[steven100]

On 8/7/2017 at 10:35 PM, BWPattaya said:

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

Understandable really as foreigners could easily leave the country

exactly .....  and obviously they have been burnt before. 

I expect it is extremely difficult to secure a loan unless it's in the Thai wifes name and / or security / guarantee to cover the loan amount.

[steven100]

On 8/8/2017 at 1:19 PM, davidst01 said:

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

but they do realise how a farang can just pack up and leave the country owing millions ....

[MaeJoMTB]

On 8/7/2017 at 8:46 PM, baywatch82 said:

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.

Siam Commercial will do it, she will need 6 months of wage slips, or similar proof of earnings.

They will give 90% at 6.2% (plus compulsory 20 years life insurance paid upfront)

On 1M loan they would require her income at around 17k/month, assuming 25 years, repayments would be around 8-9k/month

Edited November 30, 2017 by MaeJoMTB

[baywatch82]

On 11/30/2017 at 11:12 AM, MaeJoMTB said:

Siam Commercial will do it, she will need 6 months of wage slips, or similar proof of earnings.

They will give 90% at 6.2% (plus compulsory 20 years life insurance paid upfront)

On 1M loan they would require her income at around 17k/month, assuming 25 years, repayments would be around 8-9k/month

Thanks I got it already from Government Savings Bank. Cheers.

[baywatch82]

On 11/30/2017 at 9:52 AM, steven100 said:

 

Edited December 3, 2017 by baywatch82

[baywatch82]

On 11/30/2017 at 9:52 AM, steven100 said:

exactly .....  and obviously they have been burnt before. 

I expect it is extremely difficult to secure a loan unless it's in the Thai wifes name and / or security / guarantee to cover the loan amount.

Hmmm procedure looks a bit different. They don't transfer money on your bank account or give you in cash, so you can leave.

The bank worker is going with you personally to the land office and does all the job, plus keeps the chanote title as the property is owned by bank for the time of the mortgage

[blackcab]

17 hours ago, baywatch82 said:

...as the property is owned by bank for the time of the mortgage

 

The ownership of the property remains with the mortgagee. The mortgagor is given an interest in the property as security for the loan, otherwise known as an encumbrance.

 

This is why, if you default, the mortgagor has to obtain the permission of the Court to repossess the property. If they already owned the property, they would not need to do this.

 

This is the essential difference between a mortgage and a sale with the right of redemption.

[Neeranam]

On 30/11/2017 at 11:12 AM, MaeJoMTB said:

Siam Commercial will do it, she will need 6 months of wage slips, or similar proof of earnings.

They will give 90% at 6.2% (plus compulsory 20 years life insurance paid upfront)

I refused the insurance, this is a scam.

[underthecounter]

  Hey there,

 

  I am going nuts over my credit, hope you guys don't mind shedding some light on it.

 

  Principal is 1.6 millions, interest is fixed at 6.25, 20 years term, reverse mortgage, wife (Thai), was forced to buy a life insurance of 7.200 bahts yearly, paid in advance for the 20 years, this was included in the principal making it 1.744 millions. Monthly installment is 16.890 bahts.

 

  First of all, I have used several online interest calculators and the monthly installment shoud be around 12k, I only get close to 15k if I insert an interest of 10%. Second, after five and a half years (68 payments), the bank says our principal outstanding balance is 1.181 millions, my own figure is around 1.073 millions. Thanks God we have the money to finish it before hand (no penalties involved) and that is what we are going to do, but, I just can't get out of my head the fact that nothing matches my own calculations. 

 

  So, what am I doing wrong? The clerks at the bank don't really know anything about interest, they just read the requirements, grab the papers, forward them to the HQ, when the answer is positive the just print the docs, wifey signs and off you go. I have tried to inquire politely about this in different occasions and, except a proper answer, I have seen all sort of reactions, but no clarification whatsoever. Is the credit system in Thailand so far off or is it me, losing my bearings already?

 

  Many thanks in advance for the help and sorry about the drift.

 

  UTC