In the property industry there are many conflicting terms regarding the types of finance available such as: construction financing for buyers, project financing, and mortgage financing. It’s important to understand these terms before you think about obtaining any such finance, because the terms do not typically result in a loan with the property acting as security and with a payment schedule consisting of 20 to 30 years as most buyers are used to outside of Asia.
Construction financing for a buyer is often constructed so that the buyers will pay in steps according to the building progress, and will have paid the full amount when the property is completed. Example; 30% down payment, 15% when the foundation is completed, another 25% when the superstructure is complete, 20% when the windows and doors are installed, and the final 10% upon completion .
Project financing for a buyer will in many situations typically come from the developer, who obtains a loan for the project and then uses this capital to finance loans to potential buyers of up to 50% of the purchase price on a short term basis (most commonly 2-3 years after the project has been completed).
Obtaining a mortgage in Thailand has always been an almost impossible option for most foreigners. In general, most banks outside of Asia are not willing to take a property in Asia as security for a mortgage outside of Thailand. The banks in Thailand have been very conservative in offering a mortgage to any foreigners even with a substantial down payment.
However, we are now starting to see some progressive international banks with branches inside Thailand, who offer a mortgage with payment terms based on 10 years. However, up until now the condition is that the property is freehold and the borrower is required to pay a down payment on 50% with the interest being between 8-10%.