Credits & Mortgages

How to buy a place

If you want to buy property in Costa Rica, you might need to get a mortgage. Banks in your home country might be willing to give you a mortgage, although many banks prefer not to do so when buying property abroad is involved.

If you obtain a mortgage in your home country, the mortgage document will have to be authenticated by the Costa Rican Consul. Alternatively you can consider applying for a mortgage (hipoteca) in Costa Rica. Mortgages can be denominated in Costa Rican Colones or in foreign currencies (in practice a US Dollar mortgage is the most common). Most banks require that you have a residency in Costa Rica and can show proof of a job and/or income. If you do not have a residency, there are still some banks (mostly foreign private banks) that might be willing to lend you money. Keep in mind that it is customary in Costa Rica that the borrower pays for mortgage costs, such as legal drafting fees in the purchase contract.

When obtaining a mortgage in Costa Rica you will often come across the terms Tasa Básica Pasiva (TBP). TBP is the interest rate calculated by the Costa Rican Central Bank every six months. Often interest rates for mortgages are indicated as TBP + X%. The percentage added is what the bank charges you. This percentage varies depending on the bank, amount, and personal situation of the borrower. The Tasa Fija or fixed interest rate is the rate applied during the first two years of the loan. TBP in October 2012 was 10,25%.

Another term you might run into is Tasa Prime Rate (TPR). TPR was 9.05% on January 2013. Dollar denominated loans face a TPR + a percentage which depends on the kind of loan you prefer. If the loan makes up for 33% or less of the total value of the guarantee (the property) you will only be charged the TPR. If the loan makes up for 50% of the total value of the guarantee, TPR + 1 is applicable to you. For a loan that make up 70% of the guarantee, the interest will be TPR + 2. The TPR interest system is applicable only for the first five years of the loan. During this period you will pay a fixed rate. After the initial five years the interest rate will be adjusted monthly.

Many different banks operate in Costa Rica and all of them have different requirements for granting a mortgage. Below is a list of some of the mortgages on offer to give you an idea. Keep in mind that every mortgage application is treated differently, depending on your income and credit history in addition to the type of property you want to buy:

• Scotiabank y Banco de Costa Rica are the two banks that give loans to foreigners who are not legal residents. They approve the application based on their credit record and the income they have in their native country. For Scotiabank, clients must be from the USA, Canada or Great Britain. 
• In Banco de Costa Rica, there are two possibilities, for residents and non residents credit can be given in dollars or colones. The Crédito residencial hipotecario (Mortgage Residency Credit) is, as the names states, for residents. You have to prove residency through your income. The minimum is US$ 1,000, the maximum is US$700,000 and the duration is up to 25 years. There is a commission fee of 2%. For non residents, it is similar although the minimum is US$50,000, the commission is 3% and the duration is up to 20 years.  
• BAC San José is a Costa Rican owned private commercial bank. Mortgages offered are nominated in Costa Rican colones and US dollars. The duration of the mortgage is 15, 20, 25 and 30 years for a mortgage in US dollars. The maximum they finance is 70%. A total of 1% on commission has to be added. For foreigners or people with other incomes, other than the usual requirements for a mortgage, there are these special requirements:

1. 1.  References from the bank, commercial and supplier
   2.  Certification of the beneficiary ownership structure of the company
   3.  Profile of the company or the activity
   4.  Financial studies of the company where the deposit is registered.