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Tighter mortgage lending enter into force this month

January 24, 2019

Banks in Thailand are bracing for tighter standards for mortgage lending set to enter into force this month in a previously announced plan by the central bank.

The new rule requires people who buy a second home to make a down payment of at least 20% of the value in order to qualify for a mortgage exceeding 10 million baht. This aims to curb loan-to-value ratios at 80%. The rule aims to curb risks and speculation in the housing market and get banks to adopt stricter down payment requirements to deal with a high rate of mortgages turning sour in a nation with ballooning household debt.

The rule, expected to be effective end January 2019, will also apply to a buyer’s second or more homes, regardless of their price.

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