Thailand’s loan-to-value (LTV) Adjustment 2025–2026: What Property Investors Need to Know

How will the latest LTV adjustments shape Thailand’s property market? Here's what every property investor should consider.

The Bank of Thailand (BOT) recently announced a strategic move to temporarily adjust the loan-to-value (LTV) regulations. Effective from May 1, 2025 to June 30, 2026, the new measures allow banks to offer home loans with up to 100% financing for first-time buyers, regardless of the property's value. This marks a significant departure from the previous policy, where 100% LTV was capped for properties priced under 10 million baht, while pricier homes were limited to 90%. 

These adjustments may open new opportunities for buyers and investors, yet they also prompt critical questions about risks, economic recovery, and growth potential in Thailand’s property sector. 

What Has Changed in LTV Regulations?

• First Homes: Under the new policy, 100% LTV is now permitted for properties at any price point, giving first-time buyers increased financial flexibility.
• Second Homes: Buyers can also secure 100% financing on homes priced under 10 million baht, but pricier homes remain capped at 80% LTV, requiring at least a 20% down payment. 
• Third and Subsequent Homes: The BOT aims to mitigate speculative risks by capping LTV for these purchases at 70%, regardless of property value, mandating a 30% down payment.

These changes could potentially address oversupply issues in the property market while injecting momentum into related sectors.

Key Challenges and Strategic Impact on Investors

While the measures aim to stimulate demand, their effectiveness depends on how property investors and key stakeholders adapt. Below are some critical challenges and opportunities to consider:

1. Balancing Economic Sluggishness

Thailand’s economic recovery has been slow, with significant headwinds impacting purchasing power and loan repayment capabilities. While extending 100% LTV to first homes enables increased market participation, questions remain about how much this will stimulate long-term housing demand without broader economic growth. 

Investor Insight: Keep an eye on the pace of recovery in key sectors like tourism and exports, as these will significantly influence homebuyer confidence and spending power.

2. Opportunities for SMEs in Real Estate

Small and medium-sized enterprises (SMEs) remain integral to Thailand’s economic ecosystem but face additional barriers due to constrained finances. 

These relaxed LTV measures might offer some financial breathing room for SME owners who invest in affordable properties under 10 million baht. However, unless economic growth accelerates, their ability to capitalize on these opportunities will be limited. 

Investor Insight: Property developers should consider introducing more flexible payment programs tailored to SME buyers to expand their market reach.

3. Limited Projected Mortgage Growth

Forecasts from the Kasikorn Research Center predict only a marginal 0.5% rise in housing loans for 2025, even under these new policies. Key factors include tightened borrower qualifications and persistent oversupply in certain market segments. 

Investor Insight: To avoid market saturation, focus on high-demand property segments and niche investment opportunities, such as environmentally certified developments or mixed-use projects.

4. Mitigating Speculative Risks

Relaxed LTV measures naturally carry the potential for speculative buying, which can destabilize the market. By retaining stricter limits on second and third-home purchases, particularly those exceeding 10 million baht, the BOT seeks to curb speculative activity. 

Investor Insight: Investors planning to expand property portfolios should avoid inflated markets and instead focus on areas with strong long-term growth potential and restrained supply.

Real-World Examples of Market Adaptation

Higher-End Buyers Benefit Greatly: Buyers in the premium property segment (homes priced over 10 million baht) stand to gain the most under this policy change. For example, a first-time buyer of a 15-million-baht luxury condominium in Bangkok can now secure the full loan, deferring significant upfront capital requirements. 

Developers Adjust Business Plans: Developers targeting middle-income buyers may shift their strategy to include homes priced above 10 million baht, aiming to attract a broader audience and capitalize on the new regulations.

Banks and Lending Institutions: With higher credit utilization possible, banks can expect increased loan volumes. However, careful risk assessment will remain central to ensure sustainable growth without triggering speculative bubbles.

What Does This Mean for Property Investors?

For property investors, these LTV adjustments provide a double-edged sword. On one side, increased financing options may drive demand, offering shorter sales cycles and reduced inventory for certain market segments. On the other, limited economic growth and cautious lending practices could temper the policy’s long-term impact. 

To maximize ROI under these new regulations, investors should carefully consider the following strategies:

• Focus on First-Time Buyers: With the new LTV adjustments encouraging first-time homeownership, demand for competitively priced, high-quality properties is likely to increase. 
• Leverage Market Data: Stay informed about high-growth zones, particularly those benefiting from infrastructure projects or urban expansion, to guide investments. 
• Diversify Investment Portfolios: Balancing between residential properties, mixed-use developments, and other asset classes could mitigate potential sector-specific downturn risks. 
• Stay Compliant: Ensure adherence to evolving regulatory guidelines, particularly for properties intended for second or subsequent purchases.

Final Thoughts

No policy exists in isolation, and the Bank of Thailand’s latest LTV adjustments are no exception. While they offer much-needed relief to the property market, their success hinges on broader macroeconomic recovery and careful execution by all industry players. 

For property investors looking to understand the nuanced implications of these changes and seeking tailored advice to optimize their portfolio, our team is here to help. Contact us today to explore the best strategies for aligning your investments with the evolving Thai property landscape.