If you are considering investing in the real estate market in Cambodia, you may want to know how to make payments for purchasing a property in Cambodia. It is commonly known that it can be a struggle for foreigners to apply for a mortgage with banks in Cambodia, so as a buyer, it is important to choose the easiest payment methods to complete your property investment plan.
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:
- Monthly instalment payments
- Payments based on construction progress
- Full payment
- Developer financing/bank financing
1. Monthly Instalment Payment
Monthly instalment payment is a payment method that allows individuals to pay for goods or services in smaller, regular payments over a set period of time. Instead of paying the full cost of an item upfront, the total cost is divided into monthly payments, making it more manageable for consumers.
For instance, let's say Mr. John purchases a pre-sale apartment in Phnom Penh, Cambodia, which costs $100,000. The developer offers a payment plan of two-year interest-free instalments. In this case, the cost of the apartment can be divided according to the chart below:
Funds |
Amount |
Payment Timeline |
| Deposit | $2000 - $3000 | Pay on the day of purchase |
| First payment |
30% of the total house payment $100,000 x 30% = $30,000 |
Within 7 days after the deposit is paid |
| Final payment |
$100,000 x 70% = $70,000 $70,000 ÷ 24 months = $2916/month |
Within 2 years (24 months) |
The advantages of monthly instalment payments include:
- Stable monthly payments
- Reduces repayment pressure
- No interest costs
2. Payment by Instalment 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.
For instance, in Borey William, a residential area in Cambodia that showcases American-style villas, the payment plan is tied to the construction project's progress. Buyers have the flexibility to make payments in accordance with the construction's advancement.
| First payment |
30% down payment upon booking |
| Second payment | 20% to be paid after the foundation work is completed |
| Third payment |
20% payment after the villa is topped off |
| Fourth payment |
20% upon completion of interior decoration |
| Final Payment | 10% upon completion |
The benefits of payment by instalment by construction progress include:
- Can raise funds in stages
- Reduces financial risk (construction first, payment later)
- No interest costs.
3. 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 agreement. This is the most favourable payment method if you want to get the best investment price. In addition, if purchasing a villa, the buyer can request for the developer to speed up the construction.
4. Bank Financing
Developer financing is a type of financing where the developer of a property provides the financing to the buyer, 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. Bank financing, on the other hand, refers to financing provided by a traditional lending institution such as a bank or credit union.
Taking Borey William as an example, the project has established partnerships with United Commercial Bank (UCB) of Cambodia, the Bank for Investment and Development of Cambodia, Phnom Penh Commercial Bank (PPCBank), and Cathay United Bank to provide buyers with mortgage support.
When booking, buyers need to pay a down payment of 15% to 30% to the developer. The remaining 70% will be provided by banks in partnership with Borey William. Buyers can repay the loan to the bank according to the payment agreement for up to 20 years. After repaying the loan, buyers can receive the hard title.
The positive aspects of developer financing/ bank financing are:
- Lowest monthly payment option
- Long loan term of up to 20 years
Although more and more banks are beginning to offer loan services to the real estate industry, most banks do not provide loan support to international investors outside of Cambodia. If you are a foreigner with a long-term residence and work history in Cambodia, you may be eligible to obtain a home loan from a bank.
Realestate.com.kh recommends that you inquire with the developer during your property viewing whether they are currently partnering with any banks to provide loan services to foreign buyers.
If you are seeking more guidance on real estate payment, our team is here to assist you. Feel free to reach out to us for more details
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