Thailand: BoT soothes ruffled feathers over new mortgage rules

• The Bank of Thailand has moved to calm jitters, saying the real estate market is unlike the 1997 financial meltdown and tighter mortgage lending measures are considered “preventive”.
• The measures tighten financial institutions’ mortgage standards, installing discipline to build up savings and reducing artificial demand to prevent speculation, helping those who have real demand to purchase homes at reasonable prices, said Wajeetip Pongpech, assistant governor for the financial institutions policy group.
• The central bank measures, expected to become clearer early Nov 18 after a public hearing on them ended 22 Oct 18, will apply to multiple mortgages only. If previous mortgages are paid off, the rules will not apply to new mortgages for second or subsequent homes
• According to the initial regulations, the regulator will require mortgage borrowers to make a down payment of at least 20% of the home value for those worth THB10mn and higher, as well as for second and subsequent mortgages.
• The new requirement is expected to come into force from 1 Jan 19.
• The bank’s mortgage lending surged 47.9% from the end of 2017 to THB16.6bn at the end of Sep 18.

External Link: https://www.bangkokpost.com/business/finance/1563502/bot-soothes-ruffled-feathers-over-new-mortgage-rules