State-owned GH Bank expects domestic interest rates will remain low over the next three years, providing a golden opportunity for people wanting to own their own homes.
GH Bank's interest rate for home loans stands at 3% ±0.25% at present, a very low rate for the past decade, said Chatchai Sirilai, GH Bank's president.
Low interest rates reduce borrowers' monthly instalment payments. The price of property in Thailand has also fallen, with a large quantity of pre-owned homes available in the housing market, said Mr Chatchai.
He said there have been no signs of speculation in the property market because of macro-prudential measures issued by the Bangkok of Thailand to curb speculative behaviour.
The central bank introduced revised loan-to-value (LTV) rules in April 2019 to prevent artificial demand for mortgages.
The regulator has since loosened the LTV regulations twice following property developers' concerns over the impact of down payment regulations on homebuyers and the property sector.
According to the revised LTV regulations, homebuyers are required to make a minimum down payment for third and subsequent mortgages of 30% of the price of the property, with second mortgages set at 10-20%, depending on how long a borrower has made payments on the first mortgage.
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 above.
Mr Chatchai said the property market is forecast to continue expanding once the construction of mass transit train routes is completed.
Homebuyers are expected to purchase properties in Bangkok's suburbs because of lower prices and commuting to downtown areas is convenient with the mass transit system.
GH Bank aims to provide housing loans worth 215 billion baht this year, a 3% year-on-year growth.
Monthly housing loan disbursement needs to average 13 billion baht to meet the 215-billion-baht target, he said.
Housing loan disbursement in January registered 9 billion baht, but the tally increased to 13 billion in February.
GH Bank has a 540-billion-baht loan assistance programme designed to help customers reeling from the crisis.
The majority of borrowers exited the programme and returned to servicing their debts, with 139 billion baht worth of loans remaining in the scheme, said Mr Chatchai.
Non-performing loans are expected to reach a maximum of 4% of total outstanding loans this year, slightly up from the existing 3.3%, he said.