Belize Mortgage Guide: What You Need To Know

If you're thinking about getting a mortgage in Belize, there are a few things you should know. First, it's important to note that mortgage rates and terms can vary depending on the bank and the developer. Generally, interest rates fall between 8% and 15%, with some banks offering rates as low as 5.5%. Most banks will require a down payment of around 50% to 60%, but there are a few options for those who can only afford a smaller down payment. For example, Belize Bank offers a residential mortgage with a down payment of up to 95% and competitive interest rates. It's also worth noting that banks in Belize do not perform credit checks, instead, they consider your assets and cash flow. Additionally, non-residents can obtain financing for purchasing homes in Belize, and some developers offer financing options. However, it is recommended to proceed with caution when it comes to developer loans as there have been instances of fraud in the past.

Residential loans

One of the financial options available to citizens and residents of Belize is a residential loan. A residential loan will enable you to build or purchase a retirement, vacation home, or condo. Once purchased or built, these homes can be rented out, providing owners with an additional source of revenue while they are not in the country.

To purchase property or build a home in Belize, you must first check the availability of properties. Most Belize real estate agents or community developments have websites where you can view available properties. You should let your agent know whether you will self-finance the purchase or receive a loan from one of the Belize banks that offer residential mortgages. It is important to note that homes in Belize are built differently from those in the US and require the approval of the Central Building Authority in the area where you plan to construct. If you intend to construct a house, it is recommended to contact an architect for advice.

The second step is to set up an account with one of the banks in Belize. The third major step is to decide on the type of collateral you will provide to the bank. Banks typically lend up to 95% of the cost of the property, so you will need to provide proof that you can contribute at least 5%. You can use the property to be purchased, another property already owned in Belize, or cash to cover this 5%.

The bank will also request documentation, including your latest tax return, current credit score, and financial statements for each borrower. Audited financial statements will be required for any loan request exceeding $2.5 million. In addition, you will need to submit recent pictures of the property, along with blueprints and construction plans. If you are borrowing as a company, you will need to provide a full set of certified corporate documents and updated financial statements. The company must also disclose the personal financials of all shareholders with equity investments exceeding 10%.

After gathering the necessary information, you can contact your banker and inform them of your interest in a residential loan. The bank will then evaluate your application and submit it for approval, which can take up to 4 weeks for banks and 8 weeks for credit unions and government banks. Once your mortgage application is approved, your banker will provide a letter of offer stating the loan conditions. After signing the letter of offer and agreeing to the loan conditions, the legal documents will be prepared for your signature, and the loan funds will become available for investing in your new property.

Interest rates

Local banks tend to cater to Belizean citizens, offering small home loans at around 8% interest rates. However, there are offshore banks located in Belize that will underwrite home mortgages for foreigners, but at a much higher interest rate (9-13%) and higher loan-to-value ratios (50%-60% LTV).

The interest rate you receive will depend on the bank you choose and your financial situation. Banks in Belize do not perform credit checks but will appraise your assets and cash flow, including debts and net worth.

It is worth noting that Belize's financial year ends in April, and from November to April, interest rates tend to be at their lowest.

Down payments

It is important to note that some banks, like Atlantic International Bank, may offer slightly more favourable terms for non-residents. They require a 40% down payment and provide financing for up to 60% of the property value. Additionally, they offer a relatively low-interest rate of 9.75% on these loans.

On the other hand, some banks, like Caye International Bank, lend on properties in multiple countries, including Belize, and require a 50% down payment. Their interest rates are on the higher side, ranging from 11% to 13%.

If you are a foreigner, it is worth noting that most banks cater to Belizean citizens first, and you may face challenges in obtaining a mortgage. However, there are offshore banks in Belize that provide mortgages for foreigners, albeit at higher interest rates of 9% to 13% and similar down payment requirements of 50% to 60%.

To summarise, the down payment requirements in Belize are substantial, and you can expect to contribute a significant portion of the property value upfront when obtaining a mortgage.

Foreigner mortgages

Foreigners can obtain mortgages in Belize, but the process is different from what they may be used to in their home countries. Local banks tend to cater to Belizean citizens, but there are offshore banks located in Belize that will underwrite mortgages for foreigners.

Interest Rates

Interest rates for mortgages in Belize are high compared to other countries. Local banks offer mortgages to citizens at around 8% interest, while offshore banks will offer mortgages to foreigners at 9-13% interest.

Down Payments

Down payments for mortgages in Belize are also high. Local banks require citizens to put down 50-60% of the property value, while offshore banks will require foreigners to put down at least 45-50%.

Credit Checks

When applying for a mortgage in Belize, there is no credit check required. Banks will instead look at your assets and cash flow. They will do an appraisal, check your cash flow, debts, and net worth.

Collateral

Banks in Belize only lend up to 95% of the cost of the property. You will need to provide proof that you can contribute at least 5%. This can be done by using the property to be purchased, another property already owned in Belize, or cash.

Bank Account

To obtain a mortgage in Belize, you will need to have an account with a Belize bank.

Other Requirements

When applying for a mortgage in Belize, you will need to provide the bank with the following:

• Latest tax return
• Current credit score
• Financial statements for each borrower
• Recent pictures of the property
• Blueprints and construction plans

Obtaining a mortgage in Belize can be a challenging process, but with the right information and guidance, it is possible for foreigners to secure financing for their dream home in this beautiful country.

Mortgage brokers

There are a few options for mortgage brokers in Belize, including both local and international banks. Here are some of the key brokers to consider:

• National Bank of Belize: The National Bank of Belize offers home loans with the lowest interest rate in the market of 5.5%, flexible repayment terms of up to 30 years, and a fixed interest rate for the life of the loan. They cater to both first-time home buyers and those looking to refinance their current mortgage.
• Caye International Bank: This bank lends on properties in Belize and other Central American countries. They offer loans with a 50% loan-to-value ratio and interest rates ranging from 11% to 13%. They lend in various currencies, including US dollars, Swiss Francs, Pounds, Euros, and Canadian dollars.
• Atlantic International Bank: Atlantic International Bank provides financing for non-residents, requiring clients to open a US dollar account and provide collateral located in Belize or cash security. They offer financing of up to 60% with a relatively low-interest rate of 9.75% and a loan term of up to 15 years.
• Credit Unions and Government-Affiliated Lending Institutions: These institutions often provide the best deals on mortgages, with the lowest interest rates (as low as 5.5%) and longer repayment terms of up to 30 years. They also offer 100% financing for new homes. Examples include the Development Finance Corporation and the National Bank of Belize.
• Local Banks: Local banks in Belize tend to cater more to Belizean citizens, offering small home loans at lower interest rates of around 8%. However, they may require a larger down payment, sometimes up to 50%-60% of the property value.

It is important to note that the interest rates and down payment requirements may vary across different banks and brokers in Belize. Additionally, some brokers may have specific requirements for non-residents or foreigners seeking to obtain a mortgage in the country. It is always advisable to do thorough research and compare multiple options before making a decision.

Frequently asked questions