meta_id 3285699

On June 30, 2569 (2026), the Royal Thai Gazette published regulatory guidance establishing risk weight standards for residential mortgage lending and related credit facilities. The guidance applies to commercial banks, finance companies, and specialised financial institutions that employ either the Standardised Approach (SA) or Simplified Standardised Approach (SSA) methodology for calculating credit risk-weighted assets. The regulation introduces loan-to-value (LTV) ratio ceilings and corresponding risk weights differentiated by property type, collateral value, and borrower classification. For residential properties with collateral valued below 10 million baht, first mortgages carry a maximum LTV ratio of 100 percent with a 35 percent risk weight. Second mortgages are classified based on borrower status: small borrowers maintaining two years or more of repayment history receive a 75 percent risk weight, while other borrowers receive 35 percent. Mortgages from the third contract onwards carry a 100 percent risk weight. Properties valued at 10 million baht or above receive differentiated treatment, with first mortgages capped at 100 percent LTV and 35 percent risk weight, and subsequent mortgages subject to 100 percent LTV with 35 percent risk weight. The guidance establishes distinct risk weights for construction loans on unencumbered land owned by borrowers, set at 35 percent with a 100 percent LTV ceiling. Non-performing borrowers or mortgages failing to meet specified criteria receive either 75 percent or 100 percent risk weights depending on borrower classification. The regulation also addresses ancillary credit facilities linked to primary mortgages, with risk weight determinations referenced to primary mortgage classifications when collateral values fall below 10 million baht and lending does not exceed 10 percent of collateral value. Financial institutions must apply these standards when calculating capital requirements for residential mortgage portfolios under both SA and SSA methodologies.