Homebuyers are increasingly being rejected for mortgages not because they lack income, but because poor financial habits and high household debt are making it harder to qualify for housing loans, according to Government Housing (GH) Bank.

Kasem Parephan, area manager for western Bangkok branch 1 at GH Bank, said only 40% of mortgage applicants were approved in the first two months of 2026.

The figures underscore the growing financing challenges in Thailand's housing market, where weak purchasing power is compounded by stricter credit assessments despite government efforts to stimulate residential demand.

"Three factors accounted for most rejected applications: elevated household debt, insufficient or unclear income documentation, and financial behaviour that raises concerns over borrowers' repayment discipline," Mr Kasem said.

Household debt remains the biggest obstacle, as many applicants already carry multiple financial obligations that leave insufficient debt-servicing capacity to qualify for additional housing loans.

Another challenge involves applicants unable to provide reliable proof of income, particularly small business owners and workers with multiple income sources whose earnings cannot be clearly verified.

The third factor is becoming increasingly significant among younger borrowers, especially freelancers, online merchants and self-employed workers whose bank statements show inconsistent cash flows and limited savings.

According to GH Bank, many applicants earn sufficient income but fail to demonstrate stable financial patterns required under lending criteria, reducing their chances of mortgage approval.

The issue suggests Thailand's mortgage market is shifting away from a pure income assessment towards closer scrutiny of financial behaviour and repayment consistency.

FINANCIAL HABITS MATTER

Tritecha Tangmatitham, managing director of SET-listed developer Supalai, said mortgage rejection has become an increasingly persistent concern despite relatively stable demand for housing.

Supalai's mortgage rejection rate increased to 17% this year from 15% last year, although the company continues outperforming the broader residential market in sales.

"Many consumers underestimate how everyday borrowing behaviour affects their mortgage applications," Mr Tritecha said. "One growing concern involves buy now, pay later services that have become increasingly popular among young consumers."

Many users assume delayed payments involving only small amounts will not affect future mortgage applications because the outstanding balances are relatively insignificant.

However, banks consider every repayment record when assessing borrowers' financial discipline, meaning even minor payment delays can weaken creditworthiness.

"Customers think a few hundred baht does not matter, but banks count everything," Mr Tritecha said.

Late payments, even on small instalments, may be interpreted as weak repayment discipline, reducing borrowers' chances of securing housing loans despite having sufficient income.

He said better financial education could help reduce mortgage rejection rates by making consumers more aware of how short-term borrowing behaviour affects long-term financing opportunities.

ADAPTING STRATEGIES

Sahatchai Kwancheun, senior vice-president for project investment at property brokerage Harrison, said demand for residential property has not disappeared, but many potential buyers can no longer borrow enough to purchase homes at prevailing prices.

"As a result, developers have increasingly reduced selling prices or disposed of inventory in bulk to investors and agents to match buyers' borrowing capacity," he said.

During the pandemic, Harrison assembled groups of domestic investors to purchase condominium units in bulk after many original buyers failed to obtain mortgages because of salary reductions or job losses.

The company then resold those units at lower prices, helping financially qualified buyers gain access to homes at more affordable levels.

According to Harrison, today's market remains constrained less by demand than by financing capacity.

"Developers continue holding substantial completed inventory, while many buyers remain unable to secure sufficient mortgage financing despite genuine purchasing interest," Mr Sahatchai said.

Harrison believes buyers who can still qualify for mortgages currently enjoy one of the strongest bargaining positions in years because developers remain highly competitive on pricing.

SET-listed Sena Development also believes improving borrowers' financial readiness has become as important as generating sales.

"Developers increasingly need to help customers prepare financially instead of simply focusing on closing transactions," said Kessara Thanyalakpark, managing director of Sena Development.

The company expanded its LivNexT programme, allowing customers to rent completed homes before purchasing while building payment records that may strengthen future mortgage applications.

Rental payments can later be converted into part of the purchase price, while customers undergo financial health assessments every six months during the programme.

The initiative aims to improve borrowers' financial profiles before they formally apply for mortgages, reducing financing risks for both customers and developers.

PREPARING BORROWERS

Meanwhile, GH Bank has introduced several programmes targeting applicants who face difficulties obtaining housing loans, said Mr Kasem.

"Our Financial School programme focuses on four major groups: borrowers with previous repayment problems, freelancers, applicants lacking formal income documentation, and newly graduated workers," he said.

The bank also launched Financial School Extra in cooperation with participating developers.

Under the programme, customers deposit monthly instalments with GH Bank, which transfers the money directly to developers as down-payment instalments for up to 12 months.

"We advise participants to maintain consistent monthly payments because mortgage affordability assessments are based on the lowest regular repayment amount demonstrated during the programme," said Mr Kasem.

Borrowers who suddenly reduce their monthly payments may unintentionally lower the loan amount they ultimately qualify for, he added.

GH Bank has also adapted its underwriting process to accommodate changing employment patterns.

Applicants such as food vendors receiving payments through QR codes may use digital transaction records as income evidence instead of traditional salary documents.

For musicians and other workers with unconventional occupations, bank officers may conduct workplace visits and request additional supporting information to verify income sources.

The bank said online merchants now represent one of the largest groups applying for mortgages, requiring more flexible methods of assessing business income.

Even so, financial discipline remains central to every application.

Applicants seeking to improve their borrowing capacity are advised to repay outstanding debts and maintain consistent financial records for at least 3-12 months before reapplying.