Bank of Thailand Uses New ‘Home Loan’ Criteria (Updated 2025 Guide)
The Bank of
Thailand introduced tightened loan-to-value (LTV) requirements, effective since 1 April 2019, for those purchasing second and third homes or properties valued over 10 million baht. The goal is to promote more stable credit standards, ensure balanced market growth, and guard against real estate speculation. Below,
WDX Properties outlines key details and how they might affect your home loan journey.
New LTV Rules at a Glance
Property price | Contract number | % Loans | Down payment |
Less than 10 million baht | 1st house 2nd house if first house was paid for ≥3 years 2nd house if first house was paid for <3 years,
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% |
Under these rules, banks must include any top-up loans—like additional credit for furniture or renovation—within your maximum loan limit, which cannot exceed 100% of the collateral’s value. However, life and non-life insurance premiums (offering extra borrower security) don’t count toward this limit, nor do SME loans using the same collateral. If you want more coverage for insurance, that remains separate from the LTV calculation.
Example Scenario
Suppose you’re buying a second home priced at 5 million baht, and you’ve owned your first home for fewer than three years. The down payment must be 20% of the new property’s value (1 million baht), limiting your bank loan to 80% (4 million baht). If the bank lends you the full 4 million baht, they may offer an additional loan of up to 1 million baht (for top-ups like decorating), not including life or non-life insurance plans or SME financing.
Remember that banks perform rigorous assessments of your financial standing. Larger down payments often translate to lower interest and smaller monthly installments. It also grants you better loan terms overall.
Why the Bank of Thailand Issued Stricter Rules
Competition in housing loans had intensified, causing some banks to relax lending standards (like zero-down-payment mortgages).
Speculative buying was rising, amplifying potential risks to the broader economy.
Unchecked speculation could spark a future financial crisis, as global examples of real estate bubbles have historically led to major economic downturns.
Who’s Most Affected?
Real Demand Buyers: If you already own a home and want a second property after 1 April 2019, or if you aim for a property above 10 million baht, you’ll need a bigger down payment. However, if you’re purchasing your very first home, the rules won’t significantly impact you.
Property Investors: Buying multiple houses for investment means more substantial initial cash outlays. Over time, though, the market should stabilize with fewer speculators, potentially benefiting serious, financially prepared investors.
Developers: Demand could temporarily dip, with some buyers delaying decisions. In the long run, developers can plan more sustainably, reducing the risk of a housing glut or bubble.
Financial Institutions: While short-term lending volume may decrease, the quality of borrowers improves, diminishing non-performing loans.
Economy: Stronger lending standards reduce the likelihood of a real estate bubble, supporting stable, long-term growth.
In essence, these tighter standards help genuine buyers secure homes at more reasonable prices while strengthening banks’ credit standards and preventing systemic economic risks.
Related Loans and Services
Beyond these new rules, many banks offer additional products—like new home loans and refinancing packages. Each has unique terms, so compare multiple institutions and gather all required documents beforehand.
Looking Ahead in 2025
Although these guidelines took effect in 2019, the market has adjusted, and the real estate landscape remains dynamic. As of this updated 2025 guide, it’s even more crucial for buyers to plan carefully. Working with an experienced agent or advisor, like
WDX Properties, can simplify negotiations and financing strategies.
For further insights or to browse the widest selection of property listings, contact us directly.
WDX Properties offers a more comprehensive user experience than other real estate websites, ensuring you find the perfect home or investment under the current loan criteria.
Contact us
@wdxproperties
+66 61 421 1596
sales@wdxproperties.com
