How to Finance Property in Mexico: 2025 Guide for Foreigners

A Focused Guide to Financing Mexican Real Estate: The 4 Primary Options for Foreign Buyers

Purchasing property in Mexico is an increasingly popular goal for US and Canadian buyers. However, navigating the financing can seem complex. While the market is evolving, the process is different from a standard purchase back home.

This guide cuts through the noise to focus on the four primary methods available to foreign buyers, helping you identify the path that best suits your financial situation.

1. Cash Purchase (The 99% Method)

The simplest and most common route—accounting for an estimated 99% of all real estate acquisitions by foreigners in Mexico—is a direct cash purchase.

In the Mexican market, "cash is king." It gives you the strongest negotiating power and simplifies the transaction significantly.

For presale or pre-construction properties, a "cash" deal doesn't typically mean paying 100% upfront. Instead, it usually involves a payment structure negotiated with the developer, such as:

• 30% down payment

• A schedule of payments made during construction

• A final balloon payment upon delivery and titling of the property

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But how do most buyers get this "cash"? Either the funds are already in hand or we go to the next method.

2. Personal Lending (Using Home Equity)

This is the most common strategy buyers use to become "cash" buyers in Mexico. Instead of seeking a loan in Mexico, buyers leverage assets they own in their home country.

The most popular tool for this is a Home Equity Line of Credit (HELOC).

If you have a paid-in-full or low-mortgage property in the US or Canada, you can open a HELOC and draw funds from it. You then use those funds to purchase the Mexican property with cash.

• The Advantage: This strategy turns you into a cash buyer in Mexico, giving you access to the best deals and simplifying the closing process. You get the benefit of a familiar, low-interest loan from your bank back home, with flexible repayment terms.

• The Requirement: This option requires you to have significant equity in your home property and a good to excellent credit score.

While traditional personal loans are also an option, they are generally less favorable due to much higher interest rates and shorter repayment terms.

3. Developer Financing

For buyers investing in presale or pre-construction projects, some developers offer in-house financing. This can be a convenient option as it bypasses traditional banks entirely.

Developer financing is a popular choice for investors who plan to use rental income to cover the loan payments.

Here are the typical terms:

• Down Payment: A large down payment is almost always required, typically ranging from 30% to 80%.

• Interest Rates: Be aware that interest rates are typically higher than those from a traditional bank or a HELOC.

• Loan Term: The financing periods are much shorter, usually lasting between 5 and 10 years.

Some developers may offer a structure with a 30-40% down payment and no other payments until the property is delivered and titled, making it an attractive option for certain buyers.

4. Cross-Border Loans

A more recent and growing option is a cross-border loan. These are mortgages specifically designed for US and Canadian citizens purchasing property in Mexico.

These programs function almost identically to a mortgage you would get back home.

• Terms: You can find familiar options, such as a 30-year fixed-rate loan.

• Loan-to-Value: Lenders will typically finance up to 80% of the property's value, depending on your credit profile.

• Currency: Loans are often USD-based, which is ideal for buyers earning in USD as it eliminates currency exchange risk.

• Requirements: These loans require a strong credit score (700+) and involve extensive paperwork, similar to a standard US mortgage application.

A crucial note for pre-construction: You can use a cross-border loan to purchase a presale property, but the loan will not close (and funds will not be disbursed) until the property is finished and ready to be titled. You will still need to provide the initial down payment required by the developer.

Which Option is Right for You?

The right financing path depends entirely on your personal financial situation, your credit history, and the assets you have.

• Cash (via HELOC): Offers the most power and flexibility.

• Developer Financing: Good for investors who want a simple, short-term loan tied directly to a presale property.

• Cross-Border Loan: The best fit for those who want a traditional, long-term mortgage without leveraging their home equity.