Thailand’s central bank has further eased mortgage loan regulations to help homebuyers, local media reports. A certain section of homebuyers in Thailand can use this facility to borrow more funds and make lower down payments.
The mortgage loan in Thailand occurs after the Bank of Thailand had imposed stringent housing loan regulations last April regarding household debt and increasing bad mortgages, the media reports said. Now it has agreed to ease the mortgage loan-to-value (LTV) regulations to help homebuyers in Thailand.
The changes to mortgage loans in Thailand came into effect earlier this week. With that, Bank of Thailand will allow first-time buyers of homes worth less than 10 million baht to borrow an additional 10 percent for furniture.
Buyers of second homes worth less than 10 million baht will be allowed to make a minimum downpayment of 10 percent. However, this condition applies only if the mortgage on the first home has been paid off for at least two years. Otherwise, a minimum downpayment of 20 percent will apply.
In the big picture, these adjustments will encourage first-time homebuyers in Thailand. Bank of Thailand governor Veerathai Santiprabhob told the media that, “If any rule is too tough or leads to many side effects, the central bank is ready to relax it. The Bank of Thailand supports people owning their own homes but wants to eliminate artificial demand in the market.”
The country’s household debt levels are high and not expected to come down this year. Last September, Thailand’s household debt was equivalent to 79.1 percent of GDP. This was among the highest in Asia, Reuters reported.