Thinking of buying property in Costa Rica and wondering how to pay for it? You’re not alone. While you can technically get a mortgage from a Costa Rican bank as a foreigner, the process is often slow, frustrating, and heavy on bureaucracy. Fortunately, there are other options—and some of them might actually keep your sanity intact.
Let’s break it down.
1. Can Foreigners Get a Mortgage in Costa Rica?
Yes, it’s possible—but it’s rarely the first choice. Local banks have a hard time verifying your foreign income, employment history, and credit. And even if you provide the paperwork, it must be translated by an official Costa Rican translator and submitted in Spanish.
Simply put, Costa Rican banks aren’t set up to easily process international applicants. If you like chasing paperwork and waiting on approvals that may never come, then by all means, apply. But for most buyers, it’s just not worth the stress.
2. Financing Through Local Costa Rican Banks
As of April 2023, a few private Costa Rican banks have begun offering mortgages to foreigners, especially since interest rates rose in North America and Europe. Banks like Banco Lafise, BAC San José, and BCT are stepping in to fill the gap.
- Down Payment: Typically 30% to 50%
- Terms: Up to 20 years
- Interest Rates: Between 8.5% and 10%
- Language: Everything in Spanish, of course
Documentation requirements are strict. Be ready to show proof of income, banking history, and source of funds. And make sure to account for translation costs, legal reviews, and the infamous Costa Rican bureaucracy.
3. International Mortgage Lenders
If dealing with a local bank sounds like too much of a headache, you're not out of luck. A growing number of U.S.- or Canada-based lenders are stepping in with cross-border financing options for vacation homes.
The catch? These loans typically come with:
- Higher interest rates (think 9%–12%)
- Shorter terms (often 5–15 years)
- Strong documentation requirements
- Sometimes higher closing costs
Still, if you prefer dealing in English and want a faster, more familiar approval process, this route might be worth exploring.
4. Owner Financing Options in Costa Rica
This is where things get interesting—and often a lot easier.
Owner (or seller) financing means the seller lets you pay off the property in installments, rather than requiring all cash up front. It’s surprisingly common in Costa Rica, especially in beach towns and vacation home markets.
Here’s what you should know:
- Down Payments: Usually over 50%
- Terms: 1 to 3 years is standard
- Interest Rates: 6% to 9% (sometimes negotiable)
- Structure: Monthly, semiannual, or annual payments
- Balloon Payments: Common—interest-only during the term, with a lump sum due at the end
Sellers usually skip the formal appraisal and are more relaxed about proof of income. They’re motivated by the sale, not red tape. As always, get everything reviewed by your attorney and structure the deal carefully with your agent’s help.
If you are a seller thinking offering financing, you will become the lender as a bank would be. We can explain you the basics of the process and risks, however we recommend that you contact your attorney for more details and to understand your rights in case of payment defaults and foreclosure.
5. Financing Through the Developer
If you’re buying a new condo or in a gated community, the developer may offer financing. These deals often resemble owner financing but can sometimes include more favorable terms.
- Shorter terms (2–5 years)
- Lower down payments
- Interest rates similar to private loans
- Flexible payment structures
Developer financing is great for buyers who plan to refinance later or pay off the loan with a future asset sale.
6. Using Home Equity or Paying Cash
One of the cleanest options is to tap into home equity from your primary residence in your home country or use savings. A HELOC (home equity line of credit) or cash-out refinance in the U.S. or Canada can fund your Costa Rican dream home without the local hassle.
Pros:
- Fast and straightforward
- No local financing complications
- No extra legal translation work
Cons:
- Currency exchange risk
- Drains equity from your existing assets
But if you want to move quickly—and avoid the Costa Rican mortgage maze—this option makes a lot of sense.
7. The Costs and Legalities of Financing
No matter which financing path you take, there are legal fees and closing costs. Here’s a quick rundown:
-
Mortgage registration in the transfer deed:
0.25% registration fee
~0.53% for documentary stamps -
Separate mortgage instrument (if needed):
Notary fees: ~0.50%–1.25% of the mortgage amount - Life insurance: Often required, but smart—if something happens to you, the loan gets paid off
- Property insurance: Covers fire, earthquakes, and keeps your investment safe
- Appraisal fees (for private lenders): $500–$1,000
- Lender admin fees: ~1.5% of the loan
- Attorney commissions (if applicable): Varies—ask upfront
Always request a full estimate during the due diligence period so you’re not surprised at closing. Your attorney should break down every cost, including hidden fees, insurance, and taxes.
Need Help Finding the Right Financing Path?
Whether you’re leaning toward owner financing, tapping your home equity, or braving the local banks, there’s a financing option out there that fits your situation. And remember: negotiating the structure of the deal is part of the fun—and part of the process.
Got questions? Let’s talk. Call us directly at the number shown in the top of this page, or contact us using our contact form. We’ll walk you through your options, help you connect with lenders (or sellers), and make sure you’re not caught off guard on closing day.