BoT unswayed by LTV relaxation requests

BoT unswayed by LTV relaxation requests

Even though property developers have asked for a relaxation of loan-to-value (LTV) regulations, the Bank of Thailand sees no need to do so.

The central bank has closely monitored the market for both housing loans and speculative behaviour, and additional relaxation is not needed as mortgage co-signers are no longer required to comply with the regulation, said Ronadol Numnonda, deputy governor of financial institutions stability.

He said the central bank will continue to monitor the market.

According to the regulations, banks are allowed to offer an LTV of 100% in mortgages for buyers of low-rise residential projects taking out their first mortgage.

"We don't think the existing LTV regulation has any effect on low-rise property projects, so it will be maintained. However, the central bank is ready to listen to private sector," said Mr Ronadol.

Developers have repeatedly called for the central bank to cancel LTV regulations for low-rise residential projects, applying them only for high-rise projects.

The central bank's LTV regulation focused on two core areas: the financial discipline of borrowers and property speculation. Since the LTV regulation was implemented on April 1, speculative behaviour has reduced, said assistant governor Wajeetip Pongpech.

"The central bank cannot say definitively that the LTV rule is the sole reason mortgages and the property markets are slowing. Other factors could be at play," she said.

The sluggish economy could lower debt repayment ability and also dent demand, said Mrs Wajeetip.

Homebuyers are required to make a minimum down payment for third and subsequent mortgages of 30% of the home price, with second mortgages set at 10-20%, depending on how long a borrower has made payments on the first one. The LTV ratio of 90-100% remains unchanged for those planning to buy a home priced below 10 million baht, but the ratio drops to 80% when the borrower buys a residence valued at 10 million baht or higher.

Do you like the content of this article?

Philippines unlikely to keep lockdown despite surging infections

The Philippines is unlikely to keep its capital and nearby areas under strict lockdown despite coronavirus infections rising by another daily record to over 136,000.


Taiwan FM says China trying to turn island into 'next Hong Kong'

TAIPEI: China is trying to turn democratic Taiwan into another Hong Kong, the island's foreign minister warned Tuesday as he met with a senior US official making a historic diplomatic trip.


Maserati extends Trofeo spice to 2020 Ghibli and Quattroporte

High-performance sedans get 590hp of Ferrari-tweaked power and shiny all-black interior.