The Kingdom of Thailand and the island of Phuket continue to attract investors from around the world with their progressive economic policies. The incredible nature, climate, and hospitality of the locals are primary reasons for many to consider moving to the Land of Smiles (read more in our article “Why People Buy in Thailand and Phuket”).
Property and, especially, land prices are steadily rising, leading to a logical question for many buyers: is there an option for a non-lump-sum payment? Let’s explore this question in detail.
Option One: Installment Plan
An installment plan is a very popular option for purchasing an apartment or villa in Phuket. Almost all developers offer interest-free installments, but only during the construction phase and until the project’s completion.
When concluding a deal, the payment schedule is specified in the Sales and Purchase Agreement and is usually tied to construction milestones.
For example, when buying a studio for 3,571,440 THB in a boutique condominium from a reputable developer (at the time of writing), with completion scheduled for December 2024, the payment schedule looks like this:
- Reservation Deposit: 150,000 THB
- First Payment (35%): within 15 days — 1,250,004 THB
- Construction Start (20%): 714,288 THB
- Structure Completed (20%): 714,288 THB
- Interior Finishing Completed (15%): 535,716 THB
- Property Transfer (10%): 207,144 THB
- Total: 3,571,440 THB (For a detailed profitability calculation of this apartment, see our article “TAT and Airbnb: A Travel Revolution and Digital Nomads”)
It’s also worth noting that developers often offer the possibility of creating a customized payment schedule.
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Ready-made properties rarely come with developer-offered installment plans. When available, they might extend for 3–5 years with a progressive interest rate. An example is the condominium The Proud Rawai, located 70 meters from the Rawai waterfront. The project is completed, and the developer offers a 5-year installment plan, with interest rates varying depending on the chosen purchase option.
Option Two: Mortgage
While installments are obtained from the developer, a mortgage must be approved by a bank.
Question: Can a foreigner get a mortgage for property? In short: Yes, but there are nuances.
Requirements typically include:
- Being officially employed in Thailand.
- Having a stable income (salary should be at least 3 times the monthly mortgage payment) for a minimum of 1–2 years.
- Usually only for Freehold purchases (read more in our article “Forms of Ownership in Thailand”).
Even then, requirements and interest rates will be higher, and the mortgage term will be much shorter for a foreigner compared to a local resident.
Many banks update their mortgage policies for foreigners, so it’s worthwhile to periodically check for changes (up until 2016, Bangkok Bank offered this option). Currently, UOB Bank can be highlighted as still offering mortgage possibilities for foreigners.
Exception: The Thai credit organization MBK Guarantee provides mortgages secured by property for up to 10 years. The property used as collateral must be located in Bangkok or resort provinces.
Conclusion
Clearly, interest-free installment plans from developers are much more popular. There’s no need to meet specific criteria, work in Thailand, prove income, prepare a list of documents, a credit report, or bank statements. There’s simply less hassle, as only a copy of your passport is typically required for the initial steps.
