Central Bank Gives Developers and Buyers Another Year - But Will This Help Jomtien
The Bank of Thailand has approved draft regulations extending relaxed loan-to-value (LTV) ratio requirements for housing loans for another year - from July 1, 2026 to June 30, 2027. The decision comes amid a prolonged downturn in the property market, high levels of unsold inventory, and new geopolitical risks related to the Middle East conflict, which is weighing on consumer confidence. Bank of Thailand Governor Sethaput Suthiwartnarueput stated that the measure aims to stimulate home purchases, support credit growth, and assist the construction sector, whose supply chain is linked to broad segments of the economy and employment.
What is LTV and Why Does Its Relaxation Matter
The LTV ratio shows what portion of a property's value a bank is willing to finance through a loan. Under strict LTV rules, a buyer needs a large down payment - for example, 20-30% of the apartment price. When rules are relaxed, banks can issue mortgages with smaller down payments, sometimes up to 100% of the property value under certain conditions.
Under current rules, valid until June 30, 2026, the LTV ceiling is set at 100% for two categories: collateral value below 10 million baht from the second loan agreement and collateral value from 10 million baht from the first agreement. The new extension maintains these parameters until mid-2027.
For buyers, this means access to mortgages with smaller savings. For developers - a chance to clear inventory, which according to several sources remains high in most segments.
Why the Bank of Thailand Extended the Measure
The country's property market is in a prolonged slowdown. Housing Business Association President Sunthorn Satthorn noted that the LTV extension is a positive signal for the sector, helping to maintain demand and supporting company liquidity. The Association expects the measure to give developers breathing room and allow buyers ready to make deals to complete purchases with fewer barriers.
Thai Condominium Association President Prasert Taedullayasatit called the decision "very positive" for the sector, which is under pressure from economic headwinds. The Association also proposed long-term measures: reducing land and buildings tax by 50%, extending the usufruct period from 30 to 60 years to stimulate investment, and introducing taxes on foreign home buyers with revenue directed toward supporting housing for low-income groups and infrastructure projects.
Real Estate Association of Thailand President Pornnarit Chunchaisit emphasized that the market remains in a prolonged downturn, but the extension of measures could stimulate demand among buyers genuinely ready to purchase. He added that developers are likely to use the measures alongside trading strategies to attract demand amid fierce competition to clear inventory.
Who Benefits and Who Risks With Relaxed LTV
The benefit extension creates opportunities but doesn't eliminate risks. Buyers with limited savings gain market access - a studio in Jomtien priced at 2.5 million baht can now be purchased with a down payment from zero to 10%, depending on the specific bank's policy and property category. But high LTV increases sensitivity to interest rate changes: with a rate increase of 1-2 percentage points, monthly payments could rise by 15-25%.
Developers gain a tool to accelerate sales, but competition remains fierce. A buyer's market means pressure on prices, discounts, and promotions. In Jomtien, where the stock of unsold condominiums remains high, especially in projects completed in 2023-2025, developers will use LTV benefits as part of comprehensive packages - free furniture, installment plans, discounts up to 20% off list price.
Banks are acting cautiously. Relaxed supervisory criteria don't mean weakened internal underwriting standards. Each bank's credit committee evaluates borrower creditworthiness, history, income stability. Non-residents and foreigners face stricter conditions: verified income required, work visa, sometimes a resident guarantor.
Limitations for Foreign Buyers in Jomtien
Foreigners buying condominiums in Thailand must consider legal restrictions. The foreign quota in any condominium cannot exceed 49% of the project's total area. If the quota is exhausted, purchase is only possible through a Thai company or in the name of a resident spouse, creating additional legal risks.
Most Thai banks don't provide mortgages to non-residents, or issue them at higher rates with down payments from 30%. Bangkok Bank, Kasikornbank, and Siam Commercial Bank have programs for foreigners, but requirements are strict: proof of overseas income, employment certificate, sometimes collateral deposit in the same bank.
The LTV extension helps Thai buyers and residents with work visas, but for tourists or remote workers without official status, access to mortgages remains limited. Cash purchase or using credit in the country of citizenship remains the main path for most Russian-speaking clients.
Practical Example: Jomtien Studio With Mortgage in 2026
Imagine a resident buyer with a work visa considering a 28 m² studio in a completed Jomtien project priced at 2.8 million baht. Under relaxed LTV, the bank may approve a loan for 100% of the value provided this is the borrower's second housing loan and the collateral value is below 10 million baht.
The mortgage interest rate in Thailand in 2026 is 5.5-7% per annum depending on the bank and borrower profile. At a 6.5% rate with a 20-year term, the monthly payment will be approximately 20,800 baht. If the rate rises to 8%, the payment increases to 23,500 baht - a 13% increase.
The buyer needs to account for additional expenses: life and property insurance (approximately 0.3-0.5% of the loan amount annually), annual land and buildings tax (typically 2,000-5,000 baht for a studio), utilities and management fund contributions (1,500-3,000 baht per month).
Risks That LTV Extension Doesn't Eliminate
LTV relaxation doesn't solve fundamental market problems. High levels of unsold inventory in Jomtien mean excess supply, especially in the studio and one-bedroom segment priced at 2-4 million baht. Competition for tenants remains fierce: rental yield from a Jomtien studio is 4-6% annually before expenses, which is lower than first-line projects in central Pattaya (6-8%).
Geopolitical risks, indicated by the Bank of Thailand, include tourism flow volatility. Jomtien depends on tourism: a drop in arrivals directly affects short-term rental demand. Middle East conflict, rising fuel prices, visa policy changes - all are uncertainty factors.
A buyer using high LTV should run a stress test: what happens if rental yield drops 20% and the interest rate rises by 2 points? If the family budget can't withstand such a scenario, high LTV becomes a trap, not an opportunity.
What Buyers Should Do: Pre-Transaction Checklist
Before taking advantage of relaxed LTV, check the following:
Creditworthiness. Calculate the monthly payment at the current rate plus 2 percentage points. If the amount exceeds 30% of your income, revise your budget or increase the down payment.
Property Liquidity. Check how many similar apartments are listed for sale in the same project and neighboring complexes. If supply exceeds 15-20 units within a 500-meter radius, resale will take months or require a discount.
Legal Clarity. Ensure the project has all permits, the foreign quota isn't exhausted, the developer has transferred common areas to the management fund. Request an extract from the Land Office and condominium charter.
Bank Terms. Clarify internal underwriting standards: some banks apply relaxed LTV only to certain projects or borrowers with high credit ratings. Obtain preliminary approval before depositing with the developer.
Alternative Scenarios. Consider purchasing a secondary market property with a 15-25% discount from new construction prices. Price savings may outweigh the high LTV benefit, especially if you have down payment savings.
What This Means for Buyers in Pattaya and Jomtien
For Russian-speaking buyers considering condominiums in Jomtien, the LTV extension until June 2027 creates a window of opportunity but doesn't guarantee a profitable deal. The market remains a buyer's market: developers are ready to negotiate, discounts are real, competition for clients is high.
If you're a resident with official income and work visa, relaxed LTV allows you to buy an apartment with minimal down payment. But remember: high debt burden increases risks when rates rise or rental yield falls. Run stress tests, check location liquidity, don't rely on developer promises of guaranteed returns.
For non-residents, mortgage access remains limited. Most banks require down payments from 30%, income verification, resident guarantor. Cash purchase or using credit in the country of citizenship is often simpler and faster.
It's important to understand: LTV extension is a temporary support measure, not a signal of market recovery. The Bank of Thailand explicitly states the sector needs help due to weak demand and high inventory. Buyers entering the market now should be prepared for long-term asset holding and possible price correction in the next 12-24 months.
Use the year until June 30, 2027 for thorough verification: compare projects, study the secondary market, get independent legal consultation, test scenarios with different rate and yield levels. Policy support helps execute transactions but doesn't replace careful underwriting and choosing the right location.
Conclusions: Opportunity or Trap
The extension of relaxed LTV rules until June 2027 gives buyers, developers, and lenders a year's breathing room. For buyers with limited savings, it's a chance to enter the market. For developers - a tool to accelerate sales. For banks - a way to support credit growth without sharply increasing risks.
But the measure is temporary, and its end is already scheduled. Key indicators to monitor until June 30, 2027: dynamics of unsold inventory, interest rate changes, tourist and expat flow, government decisions on tax incentives and visa policy.
Buyers using high LTV should verify fundamental indicators, run stress tests, and avoid excessive leverage. Regulatory support helps but doesn't eliminate the need for careful property selection and cautious debt management. The Jomtien market offers opportunities, but only for those prepared to work with numbers rather than rely on promises.
