San José, Costa Rica, since 1956

Banks are Back in the Home Finance Game

The Construction and Housing Expo, or Expo Construcción, brought together sellers and would-be buyers of home appliances, construction materials and building-related services from Wednesday through Sunday in San Antonio de Belén in Heredia. Under one roof, visitors to the fair could find doorknobs, showerheads, solar water heaters, refrigerators, floor tiles, plumbing materials and even luxury items such as hot tubs.

But at the center of the sprawl of displays sat the most essential stands for realizing homeownership and remodeling dreams: those of the banks. Several public and private banks, including Banco Nacional, Banco de Costa Rica (BCR), HSBC, Banco Popular and BAC, were promoting their limited-time-only housing and construction financing deals. Of the five banks interviewed by The Tico Times, each claimed to offer home construction financing for at least 80 percent of the cost of the project for terms of up to 30 years. Both BCR and Banco Nacional offer 100 percent financing.

“We want to offer premiums to people who are looking to buy or build a home,” said Olman Fallas, the sales and customer service manager at BCR. “We are coming out of a recession year and a lot of people are just starting to regain their financial footing. What we aim to do is offer a plan that will help them reestablish stability over the long term.”

The financing offers are accompanied by discounted interest rates in both dollars and colones. The offerings vary among the banks, but in general include very low interest rates over the first one to three years of a mortgage, with incremental growth beginning in year four or five. The initial interest rates on financing range between 2 and 7 percent in colones and 3.5 to 8 percent in dollars. All banks offered financing for terms of up to 20 or 30 years.

In addition to generous financing, some banks are also promising to pay percentages commissions, legal expenses and closing costs to entice interested homeowners.

The recent push by national banks to generate attractive financing packages for home purchases and construction is a result of the reopening of credit lines, which were extremely limited in the recession year of 2009. Since the economy began showing signs of improvement, all banks operating in Costa Rica have been granted significant increases in the credit that they can offer customers in 2010.

“At the beginning of this year, a credit line of 40 billion colones (over $75 million) was approved by our regional director,” said Cristian Vega, the coordinator of area  sales and production for Banco Popular. “This is significantly more credit than we had to work with in 2009.”

The expanded credit is also anticipated to revitalize home purchases and construction. In 2009, construction fell by over 30 percent, making it the hardest-hit sector during the economic crisis.

“Definitively, the construction sector is going to grow slowly over the year,” said Arnoldo André Tinoco, second vice president of the Costa Rican Chamber of Commerce. “The recovery of the commerce sector depends on construction, which drives production and consumption. Construction requires a lot of investment and, because credit was closed in 2009, people couldn’t invest. This year there will be much more credit available from the banks.”

Judging by the endless lines at the bank stands at Expo Construcción, it would appear the bank offerings are indeed attractive to prospective homeowners. There were seven bank and credit agencies present at the expo, each with large displays reading “We finance 100 percent” or “Do you want your own home?” or signs with families smiling in front of a “Sold” sign in their yard or home. It also seems clear that the packages offered by the banks will generate significant competition among them.

“We already bank with Banco Costa Rica (BCR), so going to them makes sense for us,” said Geraldo Retana, who stood in line with his wife and child. “We looked at some of the offers of other banks, but, for us, the 100 percent financing is the best one available.”

Regardless of which bank attracts the most prospective buyers, it appears the housing market and the improving economy are feeding off of each other.

“We’ve had people coming in search of all sorts of financing,” said Víctor Falcón, a mortgage executive at Banco Nacional. “Some want to buy lots, some have lots and want to build, some want to buy lots and build in order to sell them. A lot of people have different objectives, but it seems that as the economy recovers, we are seeing much more interest in the purchase or construction of housing than last year.”


Mortgage and

Financing Offerings

at National Banks


Up to 80 percent financing of appraised value Down payment ranging between $10,000 to $400,000 Financing offered in periods of 15, 20, 25 and 30 years Initial interest rates between 6.15 and 7.75 percent, depending on plan


Banco Costa Rica (BCR)

Up to 100 percent financing offered Financing for up to 25 years (in dollars) Initial interest rates between 3.75 percent and 7 percent


Banco Popular

Up to 80 percent financing based on appraised value Financing for up to 20 years Initial interest rate of 8 percent Offer ends May 31


Banco Nacional

Up to 100 percent financing based on appraised value Financing for up to 25 years Initial interest rates between 7 and 8 percent



HSBC mortgage and financing plans are determined by salary. All rates and terms are determined according to the applicant’s income



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