Mexico mortgages with lower interest and down payment amount now available

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November 2, 2020

In recent years, mortgage options have gradually emerged through private funds and individuals, as well as banks, in order to offer reliable financing for foreigners. After there were no financing programs for foreigners for almost 10 years, But now all that is changing with new products.

Financing in Mexico

Mexico has for years remained the preferred retirement destination for Americans and Canadians due to its low cost of living, its climate, and its proximity to the US and Canada. Many foreign retirees have had enough liquidity to buy their ideal retirement home in Mexico. For those who have not had sufficient funds, this dream has been unattainable if they do not have financing options.

In fact, from 2003 to 2010, banking institutions in Mexico offered mortgage alternatives for foreigners, with interest rates between 5% and 6%. But then these options were no longer offered. Fortunately, today, foreigners can obtain a loan with a Mexican bank

Benefits of obtaining a mortgage in Mexico

In general, as a foreigner, you must follow the same steps to obtain the mortgage, as a Mexican citizen would. But, you should consider that interest rates will be higher in Mexico than in the United States and Canada, because someone who does not live permanently in the property represents a greater risk for banks of not meeting monthly payments. However, there are several advantages of obtaining financing in Mexico in pesos:

  • Securing a loan in Mexico will not affect your credit score in your country.
  • The exchange rate will probably be in your favor.
  • You can earn income in US dollars by buying a property in Mexico where, if you decide to rent it, your clients will pay you in US dollars, while your mortgage will be in Mexican pesos.
  • Have access to extra money that you did not know was available to you.

Steps and requirements to obtain financing in Mexico

A very important aspect that you should consider when buying a property and obtaining financing in Mexico is something called “Restricted Zone”, which is an extension of land that extends 50 km from any coast and 100 km from international borders. . In this area, foreigners cannot have title directly when buying property. But they can establish a bank trust and become the first beneficiary of this trust. The trust grants all rights to the foreign buyer as the owner of the property title.

There are 3 big steps in the process of obtaining financing to buy a property in Mexico as a foreigner:

  1. A credit authorization must be done. For this, you must send your documents to the financial bank and they will carry out an investigation and analysis that will determine if you are subject to credit.
  2. Carry out the property appraisal.
  3. Carry out the bank trust.

Even if the requirements may vary depending on the type of financing, the requirements are often similar. In the case of “Mortgage one” the requirements are:

  • Minimum age limit of 18 years and maximum of 59 years and 11 months.
  • A valid ID or passport
  • A proof of current address (water, electricity, or phone)
  • A birth certificate
  • Bank vouchers or payroll receipts for the last 6 months.

The information presented was provided by Financial Institutions and Mortgage Simulators in the first half of September 2020, calculated on a credit of 1 million pesos.

FIXED PAYMENT FOR 20 YEARS

In a more conservative credit scheme with fixed payments in 20 years, recommended for people with a consolidated financial situation , because:

  1. It gives you the peace of mind that you will always pay the same no matter what.
  2. The amount of the credit compared to the value of the property is less and a greater savings is required for the down payment.
  3. The initial monthly payment is higher than in increasing payment schemes, but it is fixed and does not change over time. In real terms (discounting inflation) the payment decreases over time.
  4. In products without prepayment penalty, it is advisable to make capital payments to pay off the credit in less time and save interest.

Interest rate (real interest on the deductible credit): 7.50%
Comprehensive
monthly payment (includes capital and interest, insurance and commissions): $ 9,341.01
Maximum Capacity: 90% Traditional
95% Infonavit and Co- financed Support
93% in Cofinavit if the value of the home exceeds the $ 7,000,000
(Cofinavit + Banorte = 110% of the appraised value as long as
the appraised value is capped at $ 7,000,000).
Minimum loan amount: $ 75,000.00
Minimum home value: $ 350,000.00
Commission for opening: 1% (can be financed)
Average CAT without VAT: 10.1% (1)
Required gross income: $ 18,682.02

Other characteristics of the credits:

Fixed Annual Rate Credit from 7.5% , rate assigned according to your credit behavior.
** The commission for opening can be financed.
If you choose Seguros Banorte, you can decide between Comprehensive or Basic coverage.
Check terms, conditions, commissions and requirements at banorte.com. Restrictions apply information subject to change without notice. (1) Mortgage Fuerte Banorte CAT Average 10.1% without VAT, for a 7.50% rate, in a term of 20 years with a credit of $ 1,000,000 pesos, 90% financing with Basic insurance coverage in the traditional scheme Home Acquisition. Calculated as of August 12, 2020. For informational and comparison purposes only. It’s your right
request the binding offer to compare different credit options.

Interest rate (real deductible credit interest): 10.65%
Comprehensive
monthly payment (includes capital and interest, insurance and commissions): $ 9,378.00
Maximum Capacity: Traditional 90%
Infonavit Support 95%
Co-financing 111%
Without limit for Select clients
Minimum credit amount: $ 100,000.00
Minimum home value: $ 250,000.00
Commission for opening: No commission for opening
average CAT without VAT: 10.7%
Gross income required: $ 24,358.00

Other characteristics of the credits:

  • Fixed Annual Rate Credit.
  • For punctual payment, the client lowers his rate to 9.65%.
  • No opening commission.
  • No appraisal payment.
  • No payment for life, damage and unemployment insurance.
  • The customer saves 3 years 4 months
  • SCOTIABANK CREDIRESIDENTIAL TIMELY PAYMENTS

Interest rate
(real deductible credit interest): Payment Initial rate 10.25% that decreases year by year, from year 5 to 20 the rate is 9.50%
Comprehensive Monthly Payment
(includes capital and interest, insurance and commissions): $ 10,794.00
Capacity Maximum: Up to 95%
Minimum loan amount: $ 250,000.00
Minimum value of the home: $ 400,000.00
Commission for opening: 0.75% Infonavit Support, Cofinavit and
Fovissste Co- financing (Alia2 Plus and Respalda2)
1.25% Without Infonavit Support
Average CAT without VAT: 11.9%
Required gross income: $ 19,840.00

Other characteristics of the credits:
-With our credit options, you pay more to capital from the beginning.
– Decrease in the rate for punctual payment.
– Financing to build or remodel and purchase a home , including pre-sale, payment of a liability to another financial institution and housing liquidity (purchase of a home other than the one left as collateral).
– Apply Infonavit, Cofinavit, Ali2 Plus and Respalda2 support .
– Free unemployment insurance covering 3 months per year.
-Life insurance, covers the holder or co-creditor.
-Damage insurance, covers the constructive value of the property, in case of total loss the insurance covers the balance of the credit and the remainder is delivered to the client, also protects your home with additional benefits such as family civil liability, theft of contents and expenses extras as a result of claims.
– Advance payments without penalty .
-Terms of 7, 10, 15 and 20 years.

Interest rate (real deductible credit interest): From 9.75% to 10.25%
Comprehensive Monthly Payment
(includes principal and interest, insurance and commissions): $ 10,359.23
Maximum capacity : 90% *
Minimum credit amount: $ 300,000.00
Minimum home value: $ 750,000.00 **
Commission for opening: 0.0%
average CAT without VAT: 11.5%
Gross income required: $ 29,597.80

Other characteristics of the credits:
-Without commissions for opening a credit, administration or prepayment, without increases in the monthly payment or in the interest rate. Recognize your good credit history

-Additional benefits if you have other Citibanamex products

-Terms available: 10, 15 and 20 years

-Terms and conditions apply

-Consult contracting conditions at www.citibanamex.com

For products co-financed with Infonavit / Fovissste
** Minimum Home Value: Macroplaza (CDMX, GDL and MTY) $ 1,000,000.00 and Rest of the Republic $ 750,000.00

  • HSBC FIXED PAYMENT

Interest rate
(real deductible credit interest): Annual fixed interest rate from 7.95% to 8.90% (1)
Comprehensive
monthly payment (includes principal and interest, insurance and commissions): $ 8,795 (2)
Maximum Capacity: Up to 90% Acquisition Traditional (3)
Minimum loan amount: $ 200,000.00
Minimum home value: $ 350,000.00
Commission for opening: 0.0%
Average CAT without VAT: 10.4%
Required gross income: $ 13,531.00 – (Required Net Income)

Other characteristics of the credits:
It is a right to request the binding offer to compare different credit options.
(1) Exclusive fixed annual interest rate for HSBC Premier clients with financing up to 90% of the appraised value of the property. Subject to the down payment, capacity and credit history of the client. For those clients who request a co-financed loan and whose maximum percentage to be financed is 80% by adding the INFONAVIT or FOVISSSTE credit and the HSBC Credit, they will be able to obtain a rate of 7.95% for terms of 15 and 20 years.
(2) The calculation is made with a fixed annual interest rate of 8.90%,with financing up to 90% of the property’s appraisal value, over a 20-year term CAT Weighted Average “HSBC Fixed Payment” for Premier clients 11.9% Without VAT. Informative. Valid as of December 1, 2020.
Calculation date: June 1, 2020. National coverage. Credit in National Currency. Information subject to change without notice. Subject to credit approval. Consult terms, contracting conditions and commissions at www.hsbc.com.mx
(3) The maximum percentage of financing based on the client’s payment capacity and credit history .

Visit your closest branch or a Mortgage Center and ask about the financing options we have for you. See www.hsbc.com.mx/hipotecario.

Interest rate
(real deductible credit interest): From 7.90% to 10.40%
Comprehensive Monthly Payment
(includes principal and interest, insurance and commissions): $ 9,396.00
Maximum Capacity: 90.0%
Minimum loan amount: $ 50,000.00
Minimum value of the home: $ 180,000.00
Commission per opening: 0 – 1.00%
average CAT without VAT: 9.8%
Gross income required: $ 23,490.00

Other characteristics of the credits:
– The rate is assigned according to the client’s profile , credit amount and down payment.
-Applies to Infonavit, Cofinavit, Alia2 and Respalda2 Support programs.
-Monthly payment includes 5 insurance coverage: life, property damage, civil liability, contents and unemployment.
NOTE: Data calculated with an annual fixed interest rate of 7.90% on a loan of $ 2,000,000.00 with a home value of $ 2,857,143.
– Monthly Deferred Authorization Commission : 0.15 per thousand on the amount of credit.
-Term of 20 years.
-LEGAL: Average CAT 13.0% without VAT for informational and comparison purposes.
– Valid until October 28, 2020.
To know the terms and requirements of contracting, financial conditions, amount and concepts of the applicable commissions call the Mortgage Assistance Center: (55) 1102 0015, consult the electronic services provided on the Internet site www.bbva.mx or go to a Branch. Fixed and annual ordinary interest rate. It is your right to request the binding offer to compare different credit options. Subject to compliance with the necessary requirements for hiring and reviewing the applicant’s updated credit history.

Interest rate (real deductible credit interest): Interest rate from 8.40% to 11.50% fixed annually.
Comprehensive
monthly payment (includes capital and interest, insurance and commissions): $ 7,604.00
Maximum capacity : 90%
Minimum loan amount: $ 600,000.00
Minimum value of the home: $ 666,667.00
Commission for opening: From 1% to 1.5%
Average CAT without VAT: 10.9%
Income Gross Required: $ 21,724.71

Other characteristics of the credits:

– Down payment from 10%.

-In the COFINAVIT scheme, the maximum financing between Infonavit and the Bank must not exceed 95% of the value of the property in relation to the appraisal.

-Prequalification response in 24 hours.

-Fixed rate, throughout the life of the loan.

-Advance payments without penalty.

-No commission for credit study.

-Without research expense.

-No increase in monthly payment.

– Average CAT without VAT in pesos, presented for informational and comparison purposes only. Valid as of March 30, 2020, subject to change without prior notice. Calculated as of December 30, 2019, on a loan of $ 1,000,000 with a home value of $ 1,500,000 and a term of 20 years. Credit Amount, Capital, Interest, Life Insurance, Damage Insurance, Credit Investigation, Opening Commission, Commission for monthly administration and Appraisal Cost are considered. Calculated for credits denominated in National Currency with an annual fixed interest rate.
The home value used for the Total Annual Cost (CAT) calculation is based on the average home values ​​stipulated by the SHF.
– The lowest opening fee and commission; as well as a higher down payment, apply only to clients with excellent credit history.
– Acquire a new or used home with B × + Casa. Consult contracting conditions at www.vepormas.com

GROWING PAYMENT AFTER 20 YEARS
This credit scheme is recommended for people who are at the beginning of their working career and their income expectation is that they will grow over time :

  1. These schemes offer a higher amount of credit by requiring a lower monthly down payment.
  2. Credit can be accessed with a lower initial payment (down payment and expenses), requiring less
    prior savings.
  3. Make sure you are well informed about how your payments will grow to plan for the future.
  4. In products without a prepayment penalty, it is advisable to make capital payments to pay off the credit in less time and save interest.

Subject to Change. The content of this article is subject to change as a result of bank rules, new information, changes in process requirements, and the availability of resources, contact your local bak for current loan conditions

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