Buying property in Costa Rica is a dream for many Americans seeking the pura vida lifestyle. But when it comes to financing that dream, many expats hit a wall of confusion. Can foreigners get mortgages in Costa Rica? What are the interest rates? How does the process compare to the US?
If you’re considering purchasing real estate in Costa Rica, understanding your mortgage options is crucial. This comprehensive guide breaks down everything US buyers need to know about financing property in paradise.
Can Foreigners Get Mortgages in Costa Rica?
The short answer is yes—but the process differs significantly from what you’re used to in the United States.
Costa Rican banks do offer mortgages to foreign buyers, but approval requirements are stricter than for residents. You’ll need to demonstrate strong financial standing, provide extensive documentation, and be prepared for higher interest rates compared to US mortgages.
That said, thousands of Americans successfully finance Costa Rican properties every year. With the right preparation and guidance, you can too.
Costa Rica vs US Mortgages: Key Differences
Down Payment Requirements
In the US, you might secure a mortgage with as little as 3-5% down. In Costa Rica, expect to put down 30-50% of the property value. Non-residents typically face the higher end of this range.
Interest Rates
US mortgage rates hover around 6-7% in 2025. Costa Rican rates range from 8-12% depending on the bank, your residency status, and loan terms. While higher, these rates reflect the local market and risk assessment.
Loan Terms
US mortgages commonly extend to 30 years. Costa Rican mortgages typically max out at 15-20 years, with some banks offering up to 25 years for exceptional borrowers.
Currency Options
You can often choose between colones (CRC) or US dollars (USD) for your mortgage. Dollar loans typically offer slightly better rates and appeal to expats earning in USD.
Processing Time
US mortgages close in 30-45 days. Costa Rican mortgages take 60-120 days due to more extensive underwriting and legal requirements.
Which Costa Rican Banks Offer Mortgages to Foreigners?
Not all banks in Costa Rica actively lend to non-residents. Here are your best options:
BAC San José
One of the most expat-friendly private banks with English-speaking loan officers and competitive rates for foreign buyers.
Scotiabank Costa Rica
International presence makes them comfortable with foreign borrowers. They offer both colones and dollar-denominated loans.
Banco Nacional
A public bank with a strong mortgage program. Stricter requirements but government backing provides stability.
Davivienda
Growing private bank with improving foreign buyer programs and competitive rates.
BCR (Banco de Costa Rica)
The largest public bank offers mortgages to foreigners but expect lengthy processing times and strict documentation requirements.
Pro tip: Private banks generally offer faster approval and better customer service for expats, while public banks may have slightly lower rates but slower processes.
Required Documents for Costa Rica Mortgage Applications
Be prepared with comprehensive financial documentation:
Personal Identification:
- Valid passport
- Proof of legal entry to Costa Rica
- Residency card (if applicable)
Financial Documentation:
- Last 3 years of US tax returns
- Last 6 months of bank statements (all accounts)
- Employment verification letter or business financial statements
- Credit report from the US
- Proof of income (pay stubs, investment income statements)
Property Documentation:
- Purchase agreement or reservation contract
- Property appraisal (arranged by the bank)
- Legal title study (estudio registral)
- Cadastral plan and property survey
Additional Requirements:
- Two Costa Rican references (personal or professional)
- Down payment verification (proof of available funds)
- Debt-to-income ratio documentation
The Costa Rica Mortgage Process: Step-by-Step
Step 1: Pre-Qualification (Week 1-2)
Contact multiple banks to understand your borrowing capacity. Get pre-qualified based on preliminary financial information. This helps you house-hunt with a realistic budget.
Step 2: Property Selection and Reservation (Week 2-4)
Find your property and sign a reservation agreement. This typically requires a deposit of 5-10% of the purchase price to take the property off the market while securing financing.
Step 3: Formal Application Submission (Week 4-6)
Submit complete documentation package to your chosen bank. The bank will verify all documents, order property appraisal, and conduct legal title review.
Step 4: Underwriting and Due Diligence (Week 6-12)
The bank’s underwriting team reviews your application thoroughly. They’ll verify income, assess property value, and conduct legal due diligence on the title. This is the longest phase—patience is essential.
Step 5: Approval and Loan Terms (Week 12-14)
If approved, you’ll receive a formal loan offer with interest rate, term, and conditions. Review carefully and negotiate if possible.
Step 6: Signing and Closing (Week 14-16)
Sign mortgage documents before a notary public. The bank disburses funds directly to the seller. You receive the property title with the mortgage lien registered.
Total Timeline: 3-4 months on average
Understanding Costa Rica Mortgage Costs
Beyond the down payment, budget for these additional expenses:
Closing Costs (3-5% of property value):
- Legal fees (attorney and notary): 1-1.5%
- Transfer tax: 1.5%
- Title registration: 0.5-1%
- Appraisal fee: $300-800
- Bank processing fees: $500-1,500
Ongoing Costs:
- Property tax: 0.25% annually
- Homeowners insurance: 0.3-0.8% annually
- HOA fees: Varies by property
- Mortgage life insurance: Often required by lenders
Mortgage Alternatives for US Buyers in Costa Rica
If traditional Costa Rican mortgages don’t fit your situation, consider these alternatives:
US Home Equity Line of Credit (HELOC)
Tap equity from your US property for lower rates (currently 7-9%) and familiar lending processes. You maintain US-based financing while buying abroad.
Developer Financing
Some Costa Rican developers offer owner financing with more flexible terms. Rates vary but can be competitive with bank mortgages. Typically shorter terms (5-10 years) with balloon payments.
US Cash-Out Refinance
Refinance your US property to pull cash for your Costa Rica purchase. Allows you to buy outright and avoid Costa Rican mortgage complexities.
Personal Loans or Portfolio Loans
For smaller property purchases or supplementing your down payment, some US lenders offer personal loans for international real estate.
Tax Implications of Costa Rica Mortgages for US Citizens
As a US taxpayer, you need to understand the tax treatment of your Costa Rican mortgage:
Mortgage Interest Deduction:
Costa Rican mortgage interest is not deductible on US tax returns if the property is a vacation home or investment property. If it’s your primary residence (you live there more than half the year), you may qualify for deductions under IRS rules.
FBAR Reporting:
If your Costa Rican bank accounts exceed $10,000 at any point, you must file FBAR (Foreign Bank Account Report) annually.
Property Income:
If you rent your Costa Rican property, report rental income on US tax returns. You may also owe Costa Rican income tax depending on rental income levels.
Always consult with a tax advisor experienced in US-Costa Rica tax treaties to optimize your situation.
Common Mortgage Mistakes US Buyers Make
Mistake #1: Waiting Until They Find Property
Starting the mortgage process after finding your dream property creates unnecessary stress. Begin pre-qualification before house hunting.
Mistake #2: Assuming US Credit Scores Matter
While some banks review US credit reports, Costa Rican lenders focus more on income verification and asset documentation. Your 800 FICO score helps, but isn’t the deciding factor.
Mistake #3: Underestimating Processing Time
Budgeting only 30-60 days for mortgage approval leads to frustration. Factor in 90-120 days for realistic planning.
Mistake #4: Not Comparing Multiple Banks
Interest rates and terms vary significantly between lenders. Shopping around can save you thousands of dollars over the loan term.
Mistake #5: Overlooking Total Costs
Focusing only on the mortgage payment while ignoring closing costs, insurance, and ongoing expenses creates budget surprises.
How Done Deal CR Streamlines Your Mortgage Process
At Done Deal CR, we’ve guided hundreds of US buyers through Costa Rican mortgage financing. Our all-in-one approach includes:
Bank Comparison and Negotiation – We analyze multiple lenders to find your best rates and terms, then negotiate on your behalf.
Document Preparation – We prepare and organize all required documentation with proper translations and notarizations.
Application Management – We submit applications, track progress, and communicate with banks throughout underwriting.
Legal Coordination – We work with trusted attorneys to ensure clean title transfer and proper lien registration.
Closing Support – We attend signings with bilingual support and verify all documentation accuracy.
From pre-qualification to receiving your property keys, we handle the complexity while you focus on planning your Costa Rican life.
