Buying a property for the first time in Cambodia can be a bit confusing, not only for foreigners and expats but even for locals. If you are considering investing in the real estate market in Cambodia, you should know how many options there are for you to choose from in order to make payments to purchase a property in Cambodia.
In this article, Realestate.com.kh will introduce common payment options for buying properties in Cambodia.
Common payment methods for buying houses in Cambodia include:
- Full payment
- Monthly installment payment
- Developer financing
- Bank financing - Mortgage loan
- Payments based on construction progress
1. Full payment
Full payment refers to the total amount of money owed by a buyer to the seller for the purchase of a property, including the purchase price and any additional costs. The buyer pays the full amount within 30 days of signing the sales and purchase agreement (SPA). This is the most favourable payment method if you want to get the best investment price.
In addition, if purchasing a villa or individual housing, the buyer can request that the developer speed up the construction as well!
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How does it work? |
Buyer pays the full amount after buying the SPA |
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Who is it for? |
Local and foreign buyers who have the full amount available upfront. |
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Pros |
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Cons |
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2. Monthly installment payment
Monthly installment payment is a payment method that allows buyers to pay for the property they purchase in smaller, regular payments over a set period. Instead of paying the full cost upfront, the total cost is divided into monthly payments, making it more manageable for consumers. This method is commonly used for either off-plan or under-construction projects.
There are some conditions that come along with the payment. For instance, buyers will need to deposit down payment for the first stage, then paid the remaining amount according to the monthly dividend along with the interest fee as well.
To attract more buyers, developers usually set a period for the buyers to pay without interest fees. For instance, let's say Mr. Dalin purchases a pre-sale condo in Phnom Penh, Cambodia, which costs $100,000. The developer offers a payment plan of two-year interest-free installments. In this case, the cost of the apartment can be divided according to the chart below:
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Fund |
Amount |
Payment Timeline |
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Deposit / Booking fee |
$2,000 - $3,000 |
Pay on the day of purchase |
|
Down payment |
30% of the total house payment $100,000 x 30% = $30,000 |
Pay when signing the sales and purchase agreement |
|
Installment payment |
$100,000 x 70% = $70,000 $70,000 ÷ 24 months = $2916/month |
Within 2 years (24 months) |
This is an example of the monthly installment payment. Another popular option for this method could be:
|
Fund |
Amount |
Payment Timeline |
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Deposit / Booking fee |
(Starting from) $1,000 |
Pay on the day of purchase |
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Down payment |
20% of the unit cost $100,000 x 20% = $20,000 |
Pay when signing the sales and purchase agreement |
|
Installment payment |
40% of the unit cost (paid monthly) $100,000 x 40% = $40,000 $40,000 ÷ 24 months = $1,667/month |
Within 2 years (24 months) |
|
Final payment |
40% of the unit cost = $40,000 |
Happens during the handover period |
The key difference between these two options is that buyers are required to pay only 60% upfront, with the remaining 40% due upon handover of the unit. This arrangement helps buyers stay financially prepared in case of any delays in the handover by the developer.
This is a great option for those who are looking to purchase a property without much financial pressure, as the buyers can divide their cash flow more efficiently. However, buyers should always make sure that the contracts clearly outline conditions for each payment milestone to avoid any future conflict.
If you’re not confident enough and want to know in detail about any of these methods, feel free to contact or visit us at Realestate.com.kh now for more professional guidance!
Additional reading: 50 Must-Know FAQs for Real Estate Investors in Cambodia
3. Developer financing
This option is often used in conjunction with the monthly installment payment method above. Developer financing is a type of financing where the developer of a property provides the financing to the buyers, typically for a new construction or development project. This type of financing may offer flexible payment terms, low down payment requirements, and other incentives to attract buyers, as mentioned above!
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What is it? |
Similar to monthly installment payments, the developers offer in-house payment plans with flexible terms to attract more buyers. |
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How does it work? |
It works differently according to the developers, but some might offer longer interest-free payment. |
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Pros |
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Cons |
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4. Bank financing - Mortgage loan
Bank financing refers to financing provided by a traditional lending institution such as a bank or credit union. Mortgage loans are a type of credit facility known as term loans that are used to help customers buy or refinance residential properties in Cambodia for either personal use like living or for business or investment purposes.
Currently, many major local banks offer mortgages to both Cambodians and some foreigners, but foreign mortgage options are often limited (mostly for foreigners with residency or long-term visas). Typical loan conditions include 50-80% of the property value, interest rates between 7-10% annually, and repayment periods up to 25 years (depending on banks).
Basic requirements for a mortgage loan include:
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Credit Score |
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Income and Employment |
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Assets and Liabilities |
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Down Payment |
**A larger down payment can reduce the amount you need to borrow and may also lower your interest rate** |
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Other Documentation |
You should always prepare these documents beforehand:
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But the most important question is still this: Can foreigners get a mortgage in Cambodia?
Actually, yes, foreigners can generally receive mortgages in Cambodia, however, the process and available options may be more limited than for locals. Foreigners, especially those who are living and working in Cambodia, can apply for home loans from certain banks. Currently, banks like RHB Cambodia, J Trust Royal Bank, Vattanac Bank, Maybank, and ACLEDA offer mortgage loans for foreigners as well (conditions and requirements vary for each bank).
Further reading: Owning property via a trust in Cambodia: How does it work?
5. Payments based on construction progress
Payment by instalment based on construction progress is a financing method commonly used in the construction industry. This payment method involves dividing the total cost of the project into several instalments, which are paid based on the completion of specific stages of the construction process. The payment schedule is typically outlined in the construction contract, with specific milestones and percentages of the total cost assigned to each instalment.
An example of the structure for this kind of payment:
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First payment |
30% down payment upon booking |
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Second payment |
20% to be paid after the foundation work is completed |
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Third payment |
20% payment after the property is topped off |
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Fourth payment |
20% upon completion of interior decoration |
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Final payment |
10% upon completion |
Payment by installment based on construction progress offers several advantages for property buyers. One of the key benefits is the ability to raise funds in stages, aligning payments with the ongoing progress of the construction. This staged approach significantly reduces financial risk, as buyers only pay once specific milestones are achieved, ensuring that funds are not fully committed upfront. Additionally, since this method does not involve borrowing from financial institutions, there are no interest costs, making it a cost-effective option for many buyers as well.
6. Mixed payment method
Consider all of the 5 options above, many developers, whether for condos, houses, or other properties, still offer flexible payment options, mainly tailored to meet the buyers’ financial situation. They can help buyers customize and mix different payment methods to make their purchase more manageable and convenient.
For example, when purchasing a condo, the developer can offer the buyer to choose the monthly installment method before the handover period, then either use the developer financing or bank financing options after the handover is completed.
**example of an option only**
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Deposit |
Normally starts from $1,000 |
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Down payment |
20% of the unit cost |
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Installment payment |
40% of the unit cost divided by 24 months with an interest-free installment |
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Final payment (Loan option) |
40% of the unit cost is covered by using the developer or bank financing options when the unit is being handed over |
Property developers usually offer mixed payment methods to increase the accessibility of their properties and attract a wider range of buyers as well. By providing or mixing various payment options, developers can accommodate different financial situations and preferences, potentially leading to more sales.
In short,
Choosing the right payment option when buying property in Cambodia depends on your financial capacity, long-term goals, and the type of property you’re eyeing. Whether you opt for a one-time full payment, prefer the flexibility of monthly installments, or want to explore developer or bank financing, understanding each method’s pros and cons can save you from unexpected complications down the line.
Whether you’re a first-time buyer or simply exploring your options, Realestate.com.kh is here to answer all your questions!
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Contact us now via-
📞+855 92 92 1000
Or come and visit us at The Connect Center- Opening hours
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Location: #306BCD,Monivong Blvd (93) Sangkat Chakto Mukh, Khan Doun Penh, Phnom Penh
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