Thai institutional group MBK PLC is now offering financing to foreigners on freehold condominiums through its subsidiary MBK Guarantee Ltd.
This appears to be an extremely notable development in Thailand, where previously financing was nearly impossible to obtain for foreigners.
Loans from THB2 million to THB20 million (US$63,431-634,313) are being offered with monthly payments from 2-10 years for all foreigners – including non-residents. Interest is set at a minimum lending rate (MLR) of Thanachart plus 2% (roughly 8.375 per cent floating), and there is an option for a balloon payment at the end of term of 50 per cent.
The company says no income or work permit is required to obtain a loan, but the property must be in prime locations of Bangkok, Hua Hin, Cha Am, Pattaya, or Samui, according to Sakchai Suthipipat Vice President, Investment Department, MBK PLC and Head of Credit Department, MBK Guarantee Ltd.
MBK Guarantee is also offering mortgages in order to refinance properties. With the mortgage financing, credit is based on the value of the property not cash flow from a business. All types of properties will be accepted, including land banks, SDH, villas, and leasehold properties will be eligible. Interest rate will be set at the MLR from Thanachart Bank plus 5.625 per cent, or roughly 12 per cent floating. Tenor is up to three years and principal payment is not required during loan period.
Conditions apply to both of these financial services that have yet to be revealed.