Down Payment + Mortgage
Down Payment and Mortgage Guide
This complete guide explains how down payments and mortgages work in Mexico, what to expect in real numbers, and how to choose the best financing strategy for your situation. It is designed for Mexican buyers purchasing a primary residence, a second home, or an investment property.
1) What Is a Down Payment?
The down payment (known in Mexico as enganche) is the portion of the property price you pay upfront with your own funds. The rest is financed through a mortgage or housing program.
Why the Down Payment Matters
It reduces the amount you need to borrow.
It lowers your monthly mortgage payment.
It can improve approval odds and loan conditions.
It acts as an initial equity cushion in the property.
2) Typical Down Payment Ranges in Mexico
A) INFONAVIT
INFONAVIT does not always require a traditional cash down payment.
Your Housing Subaccount savings can function as your initial equity.
In many cases, no additional cash down payment is required.
You should still budget for taxes and notary-related closing costs.
B) FOVISSSTE
FOVISSSTE works similarly to INFONAVIT but is designed for government employees.
The housing subaccount is used as part of the purchase.
Cash down payment requirements are usually limited or not required.
C) Bank Mortgage (Primary Residence)
Typical down payment: 10% to 20% of the property price.
Buyers with stronger income and credit profiles may qualify for lower percentages.
D) Bank Mortgage (Second Home or Vacation Property)
Typical down payment: 15% to 30%.
Second homes are considered higher risk by banks, so requirements are stricter.
3) What Is a Mortgage?
A mortgage is a long-term loan used to purchase property. You repay it over time through monthly payments that include principal and interest, and usually mandatory insurance.
Main Mortgage Components
Principal: the amount borrowed.
Interest: the cost of borrowing the money.
Term: usually 10 to 20 years in Mexico.
Insurance: life insurance and property damage insurance are typically required.
4) Types of Mortgages in Mexico
A) INFONAVIT Mortgage
Designed for formal private-sector workers.
Fixed, income-tiered interest rates.
Payments are linked to your employment contributions.
Strong option for first-time buyers.
B) FOVISSSTE Mortgage
Designed for public-sector workers.
Structured program with specific eligibility rules.
Competitive conditions for qualifying buyers.
C) Bank Mortgage
Traditional mortgage offered by banks and financial institutions.
Greater flexibility in property choice.
Requires stronger credit profile and down payment.
Must be compared using total cost, not just interest rate.
D) Mixed Mortgage (Cofinavit)
Cofinavit combines INFONAVIT with a bank loan.
Increases buying power.
Useful when INFONAVIT alone is not enough.
5) Closing Costs You Must Budget For
Beyond the down payment, buyers must cover closing costs. A realistic budget is typically 4% to 7% of the property value, depending on the state.
ISAI (Property Acquisition Tax): varies by state and municipality.
Notary fees and deed costs: legal formalization of ownership.
Public Registry fees: registration of the deed.
Appraisal: required by lenders.
Certificates and paperwork: lien checks and legal documents.
6) How to Choose the Right Mortgage Strategy
Primary residence: INFONAVIT, FOVISSSTE, or bank mortgage with lower down payment.
Second home: bank mortgage or developer financing.
Investment property: focus on cash flow, HOA costs, and financing flexibility.
7) Step-by-Step Mortgage Process
Initial evaluation: review income, credit, and goals.
Pre-qualification: estimate how much you can borrow.
Property selection: choose homes that fit your budget and loan rules.
Formal application: submit documents to the lender.
Appraisal: lender values the property.
Approval: final credit authorization.
Closing: deed signing before a notary and fund disbursement.
Key Benefits
Free Advisory: We explain your real options clearly, without pressure.
Financing Strategy: We help you choose between INFONAVIT, banks, or mixed solutions.
Pre-Qualification Support: We help you understand your true buying power.
Process Management: We coordinate with banks, INFONAVIT, and notaries.
Risk Reduction: We help you avoid overextending or choosing the wrong loan.
End-to-End Support: From strategy to closing and beyond.
Next step: Share your income range, target price, and whether this is a primary home, second home, or investment. We will map out the best down payment and mortgage strategy for you.
Frequently Asked Questions
How much money do I need upfront?
You need the down payment (if required) plus 4% to 7% of the property value for closing costs.
Can I buy without a down payment?
In some INFONAVIT or FOVISSSTE cases, yes. However, you will still need funds for closing costs.
Is it better to put a larger down payment?
Usually yes. A larger down payment reduces monthly payments and total interest, but you should keep an emergency fund.
How long does mortgage approval take?
Typically 3 to 6 weeks once all documents are submitted.
Can I use rental income to qualify?
Some banks may partially consider rental income, but this depends on documentation and lender policy.
What happens if interest rates change?
Most Mexican mortgages are fixed-rate, so your payment remains stable over time.
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