Bank of Thailand relaxes mortgage rules for property market

The Bank of Thailand is changing its rules on mortgage loans to support the struggling property market. They believe this adjustment will not pose significant risks to financial stability. Starting from May 1, 2025, until June 30, 2026, the new rules will allow loans of up to 100% of the property's value for first homes worth over 10 million baht. It will also apply to second homes valued under 10 million baht. The central bank made this announcement on Thursday. The property market is facing challenges due to high household debt and cautious lending from banks. This has led to reduced demand for new homes. Additionally, international buyers have not fully returned to the Thai market yet. Property developers feel that current LTV regulations could be relaxed without risking financial stability. Right now, first-time buyers can get loans of up to 100% for homes under 10 million baht and 90% for homes priced at 10 million baht or more. Second-home buyers have different limits based on how long they have been paying their first mortgage. These LTV measures were first introduced in April 2019. They were relaxed temporarily between October 2021 and December 2022 after the pandemic but were reinstated early in 2023 due to worries about property speculation. An official from the Bank of Thailand stated that relaxing these rules wouldn't significantly increase risks since lenders are already being careful with loans.