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Plan & Learn

For many, securing a mortgage is an integral step to the home-buying process in Costa Rica. Determine how much you can afford, and speak with several lenders to make sure their calculations coincide with your own.

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Mortgages 101

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Refinance Your Mortgage

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Costs & Fees

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Cheap Properties

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IRA to Buy Property

Getting a Loan

Create a monthly budget – be sure to account for additional expenses like homeowner's insurance and general maintenance – to determine the maximum monthly payment you can afford. The general rule of thumb is to spend no more than 1/3 of your net monthly income (after taxes) on a housing payment. Depending on your existing debt, some Costa Rican banks may lend up to 50% of your net salary. 

Use an online mortgage calculator to establish your maximum mortgage amount. Keep in mind that you'll be required to provide a minimum 15% down payment, and interest will run you 7-10% over a loan term of 20-30 years. Typically, U.S. dollar loans carry a shorter term. 

Saving for a down payment takes time and diligence. If you take out a loan with a Costa Rican bank, you'll be required to put 15-20% down – that's $30,000-$40,000 on a $200,000 home. Begin your savings fund by reducing your living expenses – downgrade your cable package, take the public bus when you can, and budget your monthly expenses. Pay for everything in cash if using your credit card will tempt you to overspend. If a relative is willing to help out, ask for a low or no-interest loan or gift. Put all your savings in a dedicated bank account or CD, especially if you find one that pays interest. Some homeowners may be willing to finance your down payment, but only take this option if they offer market interest rates.

Mortgage loans are available to residents and non-residents of Costa Rica. Lenders include private and state banks, private lenders (known as prestamistas), and mortgage brokers that connect clients with creditors abroad. All lenders look for a good credit history (minimum credit score of 650), stable income and a decent debt-to-income ratio. You will need to provide income verification, bank statements, past tax returns, and all lenders will perform an international or local credit check. If you've had an account with a public Costa Rican bank for five or more years, the bank may opt to perform a local credit check only. 

Getting pre-approved for a mortgage means that you have a written commitment for a certain loan amount. This is an important step in your home-buying journey, as a lender may determine that you can borrow a different amount than you originally calculated. Pre-approval will narrow your home search to only those properties you can afford, making your house hunt more efficient and less frustrating. Speak with several local banks or a mortgage broker about the process and requirements for obtaining pre-approval.