Navigating Mortgage Options in Costa Rica: Your Comprehensive Guide to Financing a Home

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Embarking on the journey of buying property in Costa Rica is an exciting endeavor, but it often comes with a myriad of financial considerations. Among these, navigating the complexities of mortgage options stands as a pivotal step. 

Knowing the nuances of Costa Rica’s mortgage market is crucial whether you’re a local trying to invest in your ideal property or a prospective expat searching for a tropical getaway. In this comprehensive guide, we delve into how to get a mortgage in Costa Rica, the different factors that affect the market price, the various mortgage options available, and other valuable data, so you can navigate the world of mortgage financing in Costa Rica smoothly.


Understanding the Real Estate Market in Costa Rica

Woman on balcony

Costa Rica’s real estate market is diverse and dynamic, offering a wide range of properties to suit different budgets and lifestyles. The market can vary significantly depending on several factors that have an impact on property value, such as:


Location is paramount in determining property prices in Costa Rica. Areas with high demand, such as beachfront properties in popular tourist destinations like Guanacaste or Jaco, or properties in the Central Valley (San José, Heredia, Alajuela provinces) command higher prices compared to properties in less sought-after areas.

View of property

Property Size

A property’s size has a major role in establishing its value; a property’s worth varies based on how many square meters it has.

Kind of Investment Property and Amenities

Costa Rica’s real estate market is influenced by the type of property, with single-family homes commanding higher prices in desirable locations. Condos, vacation rentals, and commercial properties vary in price depending on location, amenities, and rental income potential. Luxury properties offer exclusive features and amenities, resulting in premium price tags.

Infrastructure Development

Infrastructure development, including road networks, airports, and utilities, can boost property prices in areas experiencing growth and improved accessibility. Investments in infrastructure enhance the appeal of certain locations, driving up demand and prices.

Couple by the pool


Tourism is a significant driver of real estate demand in Costa Rica. Areas with thriving tourism industries often experience higher property prices due to the demand for vacation rentals, second homes, and investment properties from both domestic and international buyers.

The Features of the Property’s Construction

This relates to the materials utilized in the building, renovation, or maintenance of the property. If premium components, opulent finishing, and first-rate amenities were employed, this would provide “peace of mind” in that the items will survive longer if renovation has been done, meaning that their gradual depreciation will be less.


Financing Options Available in Costa Rica

Bank and financing options

In Costa Rica, homebuyers have access to a variety of financing options each with its own set of features and eligibility criteria.

Fixed-Rate Mortgages

Fixed-rate mortgages offer stability and predictability as the interest rate remains constant throughout the loan term. Typically, borrowers need to demonstrate a steady income, a good credit history, and provide a down payment, usually ranging from 20% to 30% of the property’s value. These types of mortgages are ideal for borrowers seeking stability and long-term financial planning, fixed-rate mortgages offer predictability but may come with higher initial interest rates compared to adjustable-rate mortgages.

Adjustable-Rate Mortgages (ARMs)

Adjustable-rate mortgages have interest rates that can fluctuate over time, usually tied to a benchmark such as the Prime Rate or LIBOR. These are suited for borrowers who are comfortable with risk and anticipate changes in their financial situation. Adjustable-rate mortgages offer lower initial payments but carry the risk of future rate increases. Borrowers who plan to sell or refinance before the initial fixed period ends may benefit from lower initial rates. Borrowers need to demonstrate financial stability and provide a down payment.

Government-Backed Mortgages

Government-backed mortgages, such as those offered by the Costa Rican Social Security Fund (CCSS), provide additional support and real estate financing options for eligible borrowers. Eligibility criteria may vary depending on the specific program, but generally, borrowers must meet income requirements and other criteria established by the government agency.

They offer lower down payment requirements, making homeownership more accessible, as well as favorable terms and conditions, including fixed interest rates and longer loan terms. The downside is that limited availability and eligibility criteria may restrict access for some borrowers, and they usually require additional paperwork and administrative requirements.

Signing paperwork

Home Equity Loans

Also referred to as a second mortgage, a home equity loan is a fantastic way to finance a Costa Rican real estate investment. Because you are using your property as collateral, or a guarantee, these loans are easier to qualify for than other kinds and can provide you access to huge sums of money.

You may obtain your credit score, proof of income, and other factors that often aid in loan approval easily because you will be taking out the loan in your home country rather than Costa Rica. However, there is a risk of foreclosure, potential fees and costs.

Interest-only Loans

With this loan the borrower only pays interest on the principal for a certain amount of time, keeping the principal balance constant. It has lower initial payments allowing more cash flow flexibility for borrowers and investors in the early stages of homeownership or investment. The con is that these loans tend to result in higher total costs and risk of payment shock when borrowers start repaying both principal and interest rates.

Owner Financing

Owner financing may be an option if you’ve located a house you want to buy but don’t have the entire amount. Usually, sellers finance 40%–50% of the purchase price after receiving a 50%–60% down payment. In general, loans have terms of three to five years and interest rates of 5% to 7%, however, they may be higher. Conditions are negotiable, but the sale price is not as negotiable. The title to the property is held by the seller at closing until the loan is paid back. There is a lien on the property and you pay the fees associated with setting up the loan with your attorney. In case of non-compliance, the owner may recover it.


Requirements for Obtaining a Mortgage in Costa Rica

While there are employees in Costa Rican banks who speak English and may assist you, most banks do not provide the mortgage criteria in English. For your information, the following is the typical documentation that the Costa Rican banking regulator (SUGEF) requests:

  • A copy of the purchase-sale contract.                                                                    
  • Confirmation of income.
  • ID for residents and two forms of identification (passport and driver’s license).
  • Social Security number.
  • Precise address from your home as shown on a property tax or utility bill.
  • A copy of the latest six months’ worth of bank statements from savings, current, retirement, and investment accounts.
  • Life and home insurance.
  • A utility bill showing your current Costa Rican or Us address.
  • A copy of the credit card statements for the previous three months.
  • Evidence of assets (title certificates, warranty deeds) registered in the customer’s or customer’s corporation’s name.
  • A register analysis of the customer’s autos and Costa Rican homes. (Should the client possess such assets in Costa Rica.)
  • Tax certification attesting to the payment of all local taxes on the property up for purchase.
  • Two verified copies of the property surveys (conducted by Catastro Nacional).
  • A utility bill showing your current Costa Rican or Us address.


Navigating the Mortgage Application Process

woman with laptop

The mortgage process in Costa Rica can be complex, especially for first-time buyers or those unfamiliar with the local banking system. Working with a knowledgeable mortgage broker or reputable real estate agent like Special Places can streamline the process and help borrowers find the best loan options for their needs.

During the application process, borrowers should be prepared to provide detailed financial information, undergo a property appraisal, and pay various fees and closing costs. It’s essential to stay organized and responsive to requests from lenders to ensure a smooth and timely approval process.

Understanding Mortgage Fees

Mortgage rates in Costa Rica are influenced by various factors, including the country’s economic conditions, inflation rates, and global financial markets. Borrowers should closely monitor interest rate trends and be prepared to lock in a rate when favorable opportunities arise.

In addition to interest rates, borrowers should be aware of the various fees associated with obtaining a mortgage in Costa Rica. These may include origination fees, appraisal fees, legal fees, and closing costs. It’s important to factor these expenses into the overall cost of homeownership and budget accordingly. Based on data spanning from 2001 to 2023, the standard interest rate for mortgage financing in Costa Rica is 14.04%.

Navigating financing options for mortgages in Costa Rica requires careful research, planning, and consideration of various factors. By understanding the local real estate market, exploring different mortgage products, and seeking professional guidance when needed, buyers can make informed decisions and achieve their homeownership goals in this vibrant and welcoming country.

beachfront villa

Whether you’re dreaming of a beachfront villa, a mountain retreat, or a bustling urban condo, Costa Rica offers a wealth of opportunities for homebuyers from around the world. With the right knowledge and preparation, financing your dream home in Costa Rica can be a rewarding and fulfilling experience and you can find support from our professionals by clicking here.

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