Costa Rica Mortgages – Private Banks

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The following financial institutions offer Costa Rica mortgages.

The private banking sector offers different types of Costa Rica mortgages which you should consider before making your final decision. There are banks that only lend in dollars, but there are banks that are willing to offer a Costa Rica mortgage in both currencies.

Before making your final decision about a Costa Rica mortgage, you have to analyze your income, your employment stability, the monthly payment due in the future, and your usual expenses in conjunction with the loan.

Please note that in the vast majority of cases, Costa Rica mortgages will only be available to legal ‘residents’ of Costa Rica.

1. BAC San Jose: Only one option is offered in US dollars, with duration from 15 to 20 years. Minimum amount to be financed is US$30,000 and maximum is US$400,000. The loan is either to buy an existing home, or for construction on an self-owned property, free of liabilities. From US$30,000 to US$150.000 – 80% can be financed, above US$150,000 – 70% is financed. On mortgages to be used as “free funding” (improvements, repair, additions) the amount ranges from US$30,000 to US$300,000 with a maximum of 70% of the total estimate.

From US$300,000 up to US$400,000 – 60% of the amount can be financed. The quarterly Libor rate plus 5.5 percentage points are added, but always with a minimum rate of 7%. When it is necessary to apply a mortgage to an existing house, the quarterly Libor rate plus 5.5 percentage points are added, with a minimum rate of 7.5%. The balloon amount and legal loan fees vary between 5.5%, if a transfer is not intended, and if it is then fees rise to 8.5%. You can find more information from BAC San Jose>.

2. Lafise: this bank offers financing in dollars with a fixed rate of 9.5% during the whole duration (15 and 17 years). Maximum loan amount is US$350,000, and the total fees are approximately 8% (This is on top of any real estate commissions). In the same currency loans are offered at a variable interest rate of 7.5%, but with running times of 10, 12 and 15 years the fees being the same 8%. The loan is available for the purchase of a new home, building on own property, property and building, remodeling, extensions, and repairs. You can see more information at Lafise

3. Scotiabank: this bank offers loans in dollars and colones with different options and running times, which go from 15 up to 30 years. The interest rates vary according to currency and client convenience. Apart from the traditional loans, the bank offers a program called ScotiaMix, which is a combined dollar/colones loan. The currency proportions are calculated according to the needs and means of each applicant.

The loan represents a first and second mortgage, where one payment is made in dollars and the other one in colones. This program finances up to 85% of the value, where the amount is determined according to the assessment of the property and the financial resources of the client.

In normal loans the interest rates vary between 20% and 21.5% (colones), and between 7.5% and 9.75% in dollars, according to the duration and the bank commission.

All the loans have fluctuating interest rates, unless otherwise stated in special promotions, which run either six months, or one year. The fees in colones are around 6.32%, and 7.5% in dollars. You can see more information at Scotiabank

4. Interfin: has a credit line in colones at the base borrowing rate plus 1% in the first year, from the second year onwards the base borrowing rate plus 3%, and from the third year onwards the base rate plus 5%. The bank finances up to 80% of the estimated value; minimum loan amount is c13 million, the maximum ó22 million with durations of 15 and 20 years.

The payment-income relation is a maximum of 30% of the family net earnings. The legal fees, in case of a buyer/seller contract, are 0.62%, and for a mortgage contract of 1.25%. If the project exceeds the former limits, the interest rate is 19%, adjusted to the base borrowing rate plus 6%. See more information at Interfin



5. Cuscatlan: offers mortgage loans both in colones and dollars with running times up to a maximum of 20 years. In colones the rate is the TB plus 10.75% (with a minimum rate of 25%) starting from the first year. In dollars, the Libor rate of six months plus 5.5% applies (with a minimum rate of 7.5%) starting from the first year. Minimum amount to be financed is US$30,000 and maximum US$250,000 for the purchase of a new home, building on own property, property and building, etc..For a loan of US$ 100,000 the legal fees and balloon costs are approximately US$8,478. The bank also offers a mortgage warranty trust fund that could save up to US$2.625 in a loan of US$100,000, compared to a traditional mortgage. See more information at Cuscatlan

6. Banex: has a credit line both in colones and dollars, both with a first mortgage warranty. In dollars the interest rate is the Libor plus 5.5% for the first and subsequent years, for 25 years. In colones it is the base borrowing rate plus 5.5% up to 30 years. The fees run up to approximately 5.8% for both currencies. Minimum amount to be financed is US$ 35,000 or c10 million colones. See more information at Banex



Look out! The following are the criteria for a bank to agree to a loan

1. Your True Financial Potential: Based on this information the bank can calculate the loan amount and its terms.

2. Personal References: From other banks or business sector to know if you actually qualify for a loan.

3. Level of Existing Financial Obligations: Here the bank can see if there could be delays in your monthly payments.

4. Property to Serve as a Guarantee: In most of the cases this will be the property to be bought or built.

Source: Interviews with the financial institutions.

Notice: all rates and information is valid as of January 15th 2005, date of the interviews with the banks.

You can find the 1, 3, 6 and 12 month LIBOR Rates here.



Our thanks to Gloriana Gomez and our friends at La Nación – Costa Rica’s largest Spanish circulation newspaper for their permission to use this article…

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Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.