Mortgage Rates in the Caribbean
Shopping for a mortgage in most Caribbean destinations is not so much a matter of ‘how low are your rates’ but more so a matter of ‘what do I need to do to qualify??’ Financing can be difficult in many locales, as the banks are simply too risk adverse after the financial collapse of 2009. Foreclosures and losses were very high in a number of spots throughout the region.
Can I get Bank Rates for my Property?
Qualifying at a bank is certainly possible, it is just very hard and it takes a long time. Patience is an absolute must, as often applications can take up to 6 months or more just to be approved. Obviously, this makes it very difficult to make a serious offer on a property. We generally avoid the banks for most of our clients, unless they are looking for a jumbo loan (we have better options than the branches for these loans).
It’s for this reason, that private mortgage options like those offered by mortgage funds are more often than not the lender of choice (necessity) for those looking to finance property in the Caribbean. Private mortgage loans are the easy option, as qualification is very straight forward. Private rates tend to be 2-3% higher than the bank rates in most destinations. For this reason, when you ask about our Caribbean mortgage rates, it is difficult to quote you until we know your situation and where the property is located. Our options vary quite significantly from island to island.
Caribbean mortgage rates are an added cost to buying property, however for those that make the decision to buy, it is very seldom a deterrent or a regret.
How do Bank Rates Compare in the Caribbean to Bank Rates at Home?
The best mortgage rates in the Caribbean do not compare with what you see in the US or Canada. The cost of funds is higher, and there are far less players to compete for your business. This is a recipe for higher costs to you, the consumer. Call it a sunshine tax.
At this time, mortgage rates for non resident borrowers is generally in the 5-7% range throughout the Caribbean (there are exceptions) for a short term loan. This maybe a broad statement as there are many different countries in the region, however this seems to be the case in most of our major markets.
How Much Higher are Private Mortgage Rates
Our private mortgage rates vary quite a bit from location to location and lender to lender. In most of our primary and secondary markets, we have rates as low as 8%, however they can be higher based on the circumstances, property type, and location. Again, it comes down to the number of lenders we have in any one jurisdiction.
Usually our private loans are interest only, making the payments on par with amortized bank loans; even lower at times. This won’t get rid of your mortgage debt anytime soon, but it will make the property more affordable on a monthly basis.
To discuss the pros and cons of the different options we have, talk to us today about where you would like to buy your new property!