Financing Options for Buying Property in Mexico

One of the first questions I get from American or Canadian clients looking at real estate in Mexico is simple: Can we finance a property here?

The short answer is yes — but the options are very different from what you might be used to in the United States or Canada. In Mexico, interest rates are typically higher than the United States, but with that comes an opportunity to enter a growing market with significant appreciation potential.

Below are seven financing options to consider when buying property in Mexico.

1. Developer Financing

This is one of the most common options for pre-construction purchases, especially in places like Los Cabos where there’s a lot of new development.

• Typical terms: 3–5 years, sometimes up to 10 years.

• Down payment: Usually around 50%.

• Interest rates: Typically 5–7%.

• Why it’s attractive: If a developer is offering financing, it often signals they are financially solid — “fly-by-night” developers rarely have the ability to finance buyers.

Tip: If a developer used to offer financing but no longer does, that’s often a red flag.  In 2025 and entering 2026, buying pre-construction real estate in markets like Cabo or Tulum is much riskier than it was 5 years ago due to inflation, increased pricing, unpredictable exchange rates and over supply of inventory in many markets.

2. Cross-Border Lending

Companies like Global Mortgage specialize in lending to foreigners buying in Mexico.

• Loan terms: 15-, 20-, or 25-year fixed-rate loans.

• Down payment: Often 30–40%.

• Interest rates: 7–10% (recent examples around 9%).

• Advantages: Fixed interest rates, no balloon payments, predictable terms.

• Extra perk: Possible to do a cash-out refinance on a property you already own in Mexico.

3. Seller Financing

This accounts for less than 5% of the market, but it’s worth asking about.

• Terms: Often 5–10 years.  3 - 5 years is more common. 50% LTV

• Pros: Can make a purchase possible without traditional lending.

• Cons: Sellers may be less flexible on price if they’re offering terms, since they’re already extending favorable conditions.

• Seller financing is much more common in buyer markets (with excess inventory) where many multiple sellers are competing against themselves.

4. Mexican Bank Financing

While possible, this is usually not recommended for foreign buyers.

• Challenges: No local credit history; different credit system from the U.S. or Canada.

• Interest rates: Often in the 10–12% range.

• Local perk: Mexican citizens may qualify for as little as 10% down, but the high interest rates still make this option less appealing compared to cross-border lenders.

5. Private Financing

Private lenders or crowdfunding can sometimes offer competitive rates.

• Example: Recent private funding at 6% interest.

• Benefit: Potentially lower rates than cross-border lending or bank financing.

• Drawback: Often based on personal connections or niche investment groups.

6. Home Equity Line of Credit (HELOC)

Many buyers use equity in their U.S. or Canadian home to purchase in Mexico.

• Benefit: You can leverage low interest rates from your home country.

• Flexibility: Funds can be used for all or part of the purchase.

• Cons: HELOC's usually have variable rates, so if interest rates increase, so will your payments.  We saw this take place when interest rates doubled in 2022 and 2023.

7. Self-Directed IRA

Yes — you can use retirement funds to buy property in Mexico.

• Requirement: The property must meet certain investment-use criteria; personal use is restricted.

• Specialist help: Work with a qualified custodian or advisor to structure it correctly.

Final Thoughts

While interest rates in Mexico are higher than in the U.S., remember that part of the appeal of buying here is the strong appreciation in many markets — especially coastal and resort destinations. In the next 5–10 years, I expect financing options to become more competitive, with lower rates and more providers entering the market.

If you have questions about any of these financing options — or want to be connected with trusted lenders, developers, or advisors — feel free to reach out.

Fletcher Wheaton — fletcher@remexico.com | MX 624-229-5228