Borrowing against property in Costa Rica means using real estate you own as security for a loan. The property is recorded as collateral, you keep using it while you repay, and the lender reviews the property and the loan amount more than your credit history. It can be a practical way to access capital for a purchase, a renovation, a business need, or a time-sensitive opportunity.
This guide explains how it works, how much you may be able to borrow, what it costs, and the risks to weigh first. It is general information, not legal or financial advice.
How Borrowing Against Property Works
With a property-backed loan, the loan is secured by titled Costa Rica real estate and recorded against the property at the National Registry. Attorneys prepare the loan documents, and the funds are released at closing. You make the agreed payments during the term and repay the principal at maturity.
With GAP Equity Loans, the lender must hold first-lien position. If the property already has a mortgage or another lien, it is paid off before or at closing, often from the new loan itself.
Common Reasons to Borrow Against Property
Buying another property, including a second home
Renovating or improving a home or rental
Funding a business need or expansion
Covering a timing gap while waiting for a sale or other funds
Paying off an existing mortgage on the property
How Much Can You Borrow?
The amount depends mainly on loan-to-value (LTV), which compares the loan with the property’s value. GAP determines the property value used for LTV, with input and acceptance from the lender. GAP prefers around 30% LTV or less, and 50% is the maximum for the standard product, not the target.
For illustration only: if the value GAP determines for a property is US$400,000, a loan at 30% LTV would be US$120,000. Loans start at US$50,000, and requests above US$1 million require additional paperwork and due diligence. Read more about what loan-to-value means in Costa Rica.
Standard Loan Terms
Terms run from six months to three years.
Payments are interest-only, with the principal repaid at maturity.
No credit score is required.
Borrowers of any nationality can apply, and Costa Rican residency is not required.
Borrowers pay the lender directly after closing.
What It Costs
There is no single rate. Pricing depends on the property, its location, the LTV, and the full transaction, and lower leverage can support better pricing. Borrowers pay the loan fees, which are deducted from the loan proceeds, so the cash you receive is less than the loan amount. Early repayment has a penalty, and its amount and conditions depend on the lender. Costa Rican law also sets a maximum annual interest rate for financing, published by the Central Bank of Costa Rica.
Interest-only payments keep the regular payment lower than a loan that also repays principal each month, but they do not reduce the total cost, because the full principal is still due at the end.
Risks to Weigh First
Your property is the security. If the loan is not repaid, a lender can enforce the mortgage through the courts, which can lead to a court auction of the property.
The principal is due at maturity. You need a realistic plan to repay, such as a sale, a refinance, or expected income.
Plans can change. Sales and refinancing can take longer than expected, so leave extra time.
Borrowing Against Property vs. a Bank Loan
Banks set their own requirements, which can make bank loans harder for newcomers, and bank loans can take many months, if not longer, to close. A property-backed loan focuses on the collateral, and GAP closes loans within 10 business days once the required documents are complete. Private loans usually cost more than bank loans, so borrowing against property in Costa Rica works best for a defined need with a clear exit.
Frequently Asked Questions
Can foreigners borrow against property in Costa Rica?
Yes. GAP reviews borrowers of any nationality, and Costa Rican residency is not required.
Do I need a credit score?
No. GAP does not require a credit score. The review focuses on the property, the loan amount, and the repayment plan.
Can I borrow against a property that still has a mortgage?
Yes, if the existing mortgage is paid off before or at closing so the new lender holds first-lien position.
How long does it take?
GAP closes loans within 10 business days once the required documents are complete. Missing documents or extra verification can delay closing.
What happens if I cannot repay?
A lender can enforce the mortgage through the courts, which can lead to a court auction. Talk with your lender and attorney early if repayment becomes difficult.
This article is general information only and is not legal, financial, or tax advice. Every loan depends on property review, documentation, and lender approval.
WhatsApp us at +506 4001 6413 to get started, or call 855-562-6427 from the US or Canada.
✓ No credit score required✓ Any nationality welcome✓ 6–36 month flexible terms✓ Interest-only payments✓ Loans from $50,000 USD✓ Closes within 10 business days✓ Up to 50% LTV
Property-backed private lending · Fast approvals · No bank bureaucracy
Article by Glenn Tellier (Founder of CRIE and Grupo Gap)
