Use and Management of Cookies
We use cookies and other similar technologies on our website to enhance your browsing experience. For more information, please visit our Cookies Notice.
Use and Management of Cookies
We use cookies and other similar technologies on our website to enhance your browsing experience. For more information, please visit our Cookies Notice.
Bank of Thailand use the new 'home loan' criteria
The Bank of Thailand announced regulations for housing loans. By tightening the loan to value ratio (LTV). For the purchase of the second and third houses or a house with a value in excess of 10 million baht. Which has been effective since 1 April 2019, with details as follows
Property price |
Contract number |
% Loans |
Down payment |
Less than 10 million baht |
1 1 st house 2 By paying the first house for 3 years or more 2 By paying the first house less than 3 years From the 3rd house onwards
|
90 – 95% 90% 80% 70% |
5 – 10% 10% 20% 30% |
From 10 million baht up |
1 – 2 From the 3rd house onwards |
80% 70% |
20% 30% |
For example, Mr. A wants to buy a second home with a value of 5 million baht and the first house has been paid for less than 3 years. According to the new rules, Mr. A must prepare a 20% down payment of the house value of 1 million baht and the bank will be able to provide loans up to 80% of the home value, not more than 4 million baht. In this case, if the bank gives a home loan of 4 million baht, the bank can give an additional loan of not more than 1 million baht. This limit does not include loans to pay life insurance premiums, non-life insurance, and loans for SMEs, meaning if you want to borrow more money to buy life and non-life insurance can be done. But also depends on the bank's consideration.
Why does the National Bank have to issue regulatory measures this time?
What effect does this regulation have on anyone?
In short, the purpose of this criterion improvement is to look after the people who want to buy a house, to get a house at a reasonable price. At the same time, raising the level of credit standards of financial institutions. And prevent systemic risks in order to prevent the economic crisis.
Article by: Nipapan Poonsatiansup,
CFP ® Dependent Financial Planner