Mortgage Interest Rates in Mexico: How They Work and How They Affect Your Loan

The interest rate is the cost you pay for the money lent to you. In a mortgage, this percentage determines how much you will pay in total over the years, beyond the original loan amount.

What Is Mortgage Interest?

It is the charge the lender applies for making money available to you. It is expressed as an annual percentage and applied to the outstanding balance of your loan each month.

Types of Rate in Mexico

Fixed rate. Does not change during the entire life of the loan, regardless of market movements. Gives you complete certainty about your monthly payment.

Variable rate. Adjusted periodically based on the TIIE (Interbank Equilibrium Interest Rate) published by Banco de Mexico. Can go up or down.

Mixed rate. Starts fixed for a period (3 to 10 years) then becomes variable. Combines initial stability with future uncertainty.

What Is the CAT?

The CAT (Costo Anual Total, or Total Annual Cost) includes the interest rate plus all associated loan costs: fees, insurance, and administrative expenses. It is the most complete metric for comparing loans across different institutions.

How to Choose the Right Rate

For foreign buyers planning to pay their mortgage from abroad, a fixed rate offers the greatest security: you know exactly how much to transfer each month in Mexican pesos, without depending on financial market fluctuations. At Flat.mx, all loans carry a fixed annual rate of 17.99%.