Bank of Thailand Eases Mortgage Rules to Support Property Sector

The Bank of Thailand is set to relax its loan-to-value (LTV) rules in an effort to support the struggling property sector, with changes effective from May 1, 2025, to June 30, 2026. The new regulations will allow loans of up to 100% of a property's value for first homes over 10 million baht and for second homes under that amount, aiming to address weak demand and high household debt, which stands at 16.34 trillion baht, or 89% of GDP. The central bank believes that while the easing of these rules may help alleviate excess supply and stimulate related businesses, it will have a limited impact on overall economic growth. Additionally, financial institutions are expected to remain cautious in their lending practices, minimizing potential risks to financial stability. The government is also planning to reduce transfer and mortgage registration fees to further support the sector. This decision follows a trend of prior relaxations in LTV regulations aimed at reviving the market after the pandemic.