How Interest Rates Work in Private Lending in Costa Rica

Interest rates for private, property-backed loans in Costa Rica work differently from a traditional bank mortgage. Rather than being based mainly on a borrower’s credit history or income documentation, rates are shaped largely by the property itself and the structure of the request.

What Influences the Rate

GAP Equity Loans coordinates with private lenders, and GAP’s own lenders sometimes fund loans directly, reflecting their confidence in the product. Every request is reviewed individually, and the rate a lender offers depends on the specific file — there is no single fixed rate that applies to every loan.

Loan-to-value (LTV) is one of the biggest factors. GAP publicly lends up to 50% loan-to-value, though private lenders tend to be conservative and often prefer staying closer to 30–40% LTV. The lower the loan-to-value, the easier a request generally is to place with a lender, and the better the chance of a lower rate; higher LTV requests tend to be harder to place and may come with a higher rate.

Other factors a lender typically weighs include the property’s location, condition, and marketability; the loan term; and how realistic the repayment plan is.

How Private Rates Compare to Bank Rates

Private lenders focus closely on the property and first-lien security rather than income and credit history, which is part of why they can move faster than a bank. For foreigners and expats specifically, GAP’s rates are generally comparable to Costa Rica bank rates.

Loan Basics That Apply Regardless of Rate

Requests start at US$50,000, with terms generally ranging from six months to three years. GAP does not require or pull a credit score for a normal property-backed request — that doesn’t mean there’s no review; every request still goes through property review, documentation, and lender approval before any terms, including the rate, are set. Once GAP has a complete file and due diligence is finished, qualified loans can often close in about 10 days.

Liens and Existing Obligations

Most GAP loans are secured by a lien on the property, though some lenders may instead choose to structure the loan through a trust — that decision belongs to the lender. If an existing lien is already on the property, it must either be paid off before closing or included in the loan amount and settled at closing. Private lenders require first-position security, so an existing first-position lien must be paid off or removed at closing so GAP’s lender can be placed in first position.

Frequently Asked Questions

Is there a fixed interest rate for GAP Equity Loans?

No. Rates are set individually based on the property, loan-to-value, term, and overall file. No specific rate is promised in advance.

Does a lower loan-to-value mean a better rate?

Generally, yes — lower loan-to-value requests are often easier to place with a lender and tend to have a better chance of a lower rate.

Does GAP require a credit score?

No. GAP does not require or pull a credit score for a normal property-backed request. Every request is still reviewed individually.

How does GAP’s rate compare to a bank?

For foreigners and expats specifically, GAP’s rates are generally comparable to Costa Rica bank rates.

Is this information a guarantee of approval or terms?

No. This article is general information only and is not financial, legal, or tax advice. Every arrangement depends on property review, documentation, and lender approval.

Ready to find out what terms might apply to your property? Contact GAP Equity Loans to discuss your situation.

For expats and foreign property owners in Costa Rica, traditional bank financing is typically not available at all — not just slow, but genuinely inaccessible. Opening a Costa Rica bank account requires permanent residency, which takes around four years to obtain starting from a temporary residency category. Without a local bank account, there is no local credit history, and bank financing is simply not an option. Private property-backed financing through GAP takes a different approach: with solid collateral and a complete file, qualified loans can close in about 10 days.

Article by Glenn Tellier (Founder of CRIE and Grupo Gap)