What Is a Down Payment and How Does It Work in Mexico?

The first step to acquiring a property is understanding what a down payment is. This determines how much you need to save and how your financing will be structured.

What Is a Down Payment?

A down payment is the amount of money you pay upfront when purchasing a property. It can range from 10% to 35% of the property value, depending on the loan conditions.

The down payment is the difference between the property cost and the mortgage you receive. For example: a $1,000,000 MXN property with $900,000 MXN in financing requires a $100,000 MXN down payment (10%).

How Much Will the Lender Finance?

Lenders typically finance between 75% and 90% of the property value. The larger your down payment, the lower your monthly payments and the shorter your debt period.

What Factors Do Lenders Evaluate?

Property value. The lender evaluates the total cost of the property and your borrowing capacity relative to that value.

Credit history. They review whether you have been responsible with your previous debts.

Income. They calculate the monthly amount you could sustain based on your income level.

Loan term. The number of years over which you can sustain the payments.

Down Payment and LTV: The Key Relationship

Your down payment directly determines your LTV (Loan-to-Value ratio). A 30% down payment equals a 70% LTV, which is the optimal point for best eligibility at Flat.mx. The larger the down payment, the lower the risk for the lender and the higher the probability of approval.