Is it easier to get a mortgage in Panama now?

Get all the data you need about the real estate market in Panama

Is it actually easier to get a mortgage in Panama now?

Yes, getting a mortgage in Panama is easier today for some first-home buyers, but the improvement stops surprisingly quickly once the property moves outside the subsidized part of the market.

The biggest change is the return of a stable preferential-interest system for new primary homes costing up to $120,000. Law 481 has been in force since the beginning of 2026, and Executive Decree 23, dated June 12, 2026, formally regulated the new regime. Buyers, banks and developers now have much clearer rules than they did during the messy transition in 2025.

For qualifying buyers, those rules can be extremely favorable. Banco General currently advertises financing of up to 98% on preferential mortgages, with borrower rates around 1.5% to 3% depending on the property's price and location. Banco Nacional and BAC also offer preferential products with very low initial contributions.

Yet bank lending figures tell us that easier rules have not created an easy mortgage market. According to the Superintendency of Banks, banks granted $132 million in new preferential mortgages during the first four months of 2026, down from $200 million during the same period of 2025. Regular mortgage originations also fell, from $270 million to $249 million.

So the answer depends heavily on what someone is trying to buy. A qualifying $100,000 first home can be financed on unusually attractive terms. A $200,000 apartment, an investment property or a home bought by a foreign non-resident remains a much harder proposition.

Buyer today	Typical situation	Financing available	How easy is it?
First-home buyer, new property ≤$120k	Preferential mortgage	Up to 95%-98% at some banks	Much easier
Resident buying >$120k	Regular mortgage	Often 90%-95%	Mixed
Used-home buyer	Regular mortgage	Around 90%	Still fairly tough
Second-home buyer	Commercial mortgage	Around 70%-80%	Harder
Foreign non-resident	Specialist mortgage	Around 60%-70%	Much harder

Why has getting a mortgage in Panama been difficult lately?

Panama's mortgage problem came from several pressures hitting buyers at once: expensive market rates, disappearing housing incentives and a badly timed change in the preferential-interest rules.

Mortgage rates rose materially from the low-rate years. The Superintendency of Banks' reference rate for residential mortgages was 5.75% from 2020 through 2022, then climbed to 6% in 2023 and 6.25% in 2024. The relevant reference rate remained above 6% during 2026.

At the same time, Panama changed one of the country's most important housing subsidies. The transition between the old and new preferential-interest regimes became so complicated that more than 9,000 mortgage processes were caught in the middle, according to the Ministry of Housing. Banks, developers and buyers had to wait for lawmakers to clarify which rules applied.

Another major subsidy disappeared before that disruption had fully passed. The $10,000 Fondo Solidario de Vivienda, which could be applied toward the purchase of lower-priced homes, ended in 2024. For someone buying a $70,000 property, losing a $10,000 contribution was equivalent to losing more than 14% of the property's value.

The result showed up quickly in housing sales. Figures from 4S Real Estate reported by La Prensa show that new-home sales fell from 4,737 units in 2024 to 2,866 in 2025, a decline of almost 40%.

The mortgage market is therefore recovering from an unusually disruptive combination of higher borrowing costs and policy changes, rather than from a normal cyclical slowdown.

Did Panama's new preferential mortgage law really make buying a home easier?

Yes, Panama's new preferential mortgage regime can dramatically lower the monthly cost of buying a qualifying first home.

Law 468, amended by Law 481, covers qualifying new primary residences costing up to $120,000. The subsidy varies according to the value and location of the home and can reduce the interest paid by the borrower by several percentage points for a defined period.

Banco General's currently published pricing shows what that looks like in practice. In Panama and Panama Oeste, the bank advertises a 2.5% nominal rate for qualifying homes between $45,000.01 and $80,000 and 3% between roughly $80,000 and $120,000. In the interior of the country, the lower bracket can fall to 1.5%.

The payment difference is large. A $100,000 mortgage amortized over 30 years costs about $422 a month in principal and interest at 3%. At 7.5%, which Banco General currently publishes for some new homes outside the preferential regime, the same $100,000 loan costs roughly $699.

That is around $277 more every month.

The comparison is especially striking because both borrowers could be buying newly built homes. Crossing the preferential threshold can change the financing economics far more than a modest difference in the property's sticker price.

$100,000 mortgage	Preferential example	Regular-market example
Interest rate	3.0%	7.5%
Term	30 years	30 years
Approx. monthly principal + interest	$422	$699
Monthly difference	—	+$277
Approx. yearly difference	—	+$3,324

Can buyers really put only 2% down on a home in Panama?

Yes, some qualifying first-home buyers in Panama can currently obtain up to 98% financing, which means a down payment as low as 2% of the purchase price before other costs.

Banco General publishes financing of up to 98% for homes covered by the preferential-interest law. Banco Nacional has also advertised up to 98% financing for qualifying preferential properties, while BAC markets preferential products with financing around 95% to 98% depending on the case.

For a $100,000 home, 98% financing leaves only $2,000 of the sale price to be funded by the buyer.

That does not mean someone can complete the entire purchase with $2,000. Legal work, registration, appraisal, insurance and other transaction expenses can still require additional cash.

The contrast with properties outside the preferential segment is much larger. Banco General currently finances up to 95% on some new homes above $120,000, around 90% on used homes and only 70% on vacation properties.

For buyers whose biggest obstacle is saving the initial contribution, the preferential program can change whether homeownership is possible at all.

Are mortgage rates in Panama cheap now?

No, regular mortgage rates in Panama are still expensive these days, especially compared with the rates borrowers became used to earlier in the decade.

Banco General currently publishes a 7.5% nominal rate for new homes outside the preferential regime and 8% for used homes. Its vacation-home mortgage is also priced around 8%, plus the 1% FECI charge where applicable.

Other banks can quote different rates according to income, employment, property value and customer relationship, so there is no single Panamanian mortgage rate. But ordinary borrowers are still operating in a market where 7%-plus financing is common.

The jump from 6% to 7.5% looks small until it is applied over 30 years. A $200,000 mortgage at 6% costs roughly $1,199 a month in principal and interest. At 7.5%, the payment rises to about $1,398.

That adds nearly $200 a month. If the rate stayed unchanged for the full term, the borrower would pay roughly $72,000 more.

Cheap subsidized mortgages exist in Panama today. Cheap commercial mortgages generally do not.

Example mortgage	Approx. published/illustrative rate	Common maximum financing	Typical maximum term
Preferential new home	~1.5%-3% in Banco General examples	Up to 98%	30 years
Regular new home	~7.5% at Banco General	Up to 95%	30 years
Used home	~8% at Banco General	Up to 90%	30 years
Vacation home	~8% + FECI where applicable	Up to 70%	20 years

Are Panama's banks actually approving more mortgages now?

No, Panama's banks are currently approving less new mortgage credit than they were a year earlier, which is the clearest reason we cannot call this a broad lending recovery yet.

Superintendency of Banks figures show $132 million in new preferential mortgages during the first four months of 2026 versus $200 million one year earlier. That is a 34% drop.

The weakness extends beyond subsidized buyers. New regular residential mortgages declined from $270 million to $249 million over the same periods, an 8% fall.

The lower-priced part of the market was hit particularly hard. New preferential lending on homes worth up to $80,000 fell by roughly 35%, from more than $97 million to about $63 million. Lending in the $80,001-to-$120,000 bracket also contracted.

Those numbers deserve more weight than promotional mortgage offers when we ask whether approval has become easier across Panama. Banks may advertise attractive products, but borrowers collectively are still receiving less new mortgage money.

New mortgages, Jan-Apr	2025	2026	Change
Preferential mortgages	$200m	$132m	-34%
Regular mortgages	$270m	$249m	-8%
Preferential homes ≤$80k	>$97m	~$63m	~-35%
Combined two main categories	$470m	$381m	~-19%

Why is Panama's mortgage portfolio growing if fewer new loans are being approved?

Panama's mortgage portfolio can keep growing even while new approvals fall because old 20- and 30-year mortgages stay on bank balance sheets for a very long time.

At the end of April, residential mortgage balances in Panama's banking system were close to $19 billion. Preferential mortgages represented about $9.47 billion, while regular residential mortgages were around $9.50 billion.

Both stocks were slightly higher than a year earlier. Preferential balances grew only around 0.4%, while non-preferential balances rose roughly 1.9%.

That sounds healthier than the new-lending figures until we remember how slowly mortgage balances move. A mortgage approved in 2019 or 2022 can still have decades left to run.

For judging how accessible mortgages are today, the flow of newly granted credit tells us more. That flow is shrinking even though the enormous stock of old mortgages is still inching upward.

Is Panama's housing market starting to recover anyway?

There are early signs that Panama's housing market is waking up again, but mortgage lending has not caught up yet.

New-home sales collapsed from 4,737 units in 2024 to 2,866 in 2025, according to 4S Real Estate data reported by La Prensa. Then the first quarter of 2026 produced 1,292 sales.

That first-quarter number is interesting. In only three months, developers sold roughly 45% as many homes as they had sold during the entire previous year. If that pace continued unchanged, annual sales would exceed 5,000 units.

Construction approvals are also showing more activity. An August analysis of preliminary INEC figures found that residential area authorized across eight major municipalities reached about 614,500 square meters in the first half of 2026, up roughly 42% year over year.

But those permits mostly represent future supply, often homes that will not be delivered until 2027 or 2028. Meanwhile, new mortgage lending through April remained sharply below the previous year's level.

Buyers may be returning before the credit system fully does. For now, housing activity looks better than mortgage origination.

Why is $120,000 such an important price in Panama's mortgage market?

The $120,000 threshold currently divides two very different mortgage markets in Panama.

A qualifying buyer purchasing a new principal residence at or below that price can enter the preferential-interest system. At Banco General, that can mean financing of up to 98%, rates around 1.5%-3% in its published brackets and terms reaching 30 years.

Move above $120,000 and the borrower generally returns to commercial mortgage pricing. Banco General currently quotes 7.5% for qualifying new homes outside the preferential regime, while financing can fall to 95%.

The gap becomes obvious when we compare homes whose prices are relatively close. A qualifying $115,000 new home can receive a large interest subsidy and require only a very small initial contribution. A $140,000 home may require more cash and carry a rate several percentage points higher.

Panama reinforced that $120,000 dividing line again very recently. The National Assembly approved Bill 661 in third debate in late August. The proposal would exempt the first sale of qualifying new homes from the 2% real-estate transfer tax on the first $120,000 of value, with a reduced progressive charge above that level for certain more expensive homes.

The bill still needs to complete the remaining legal formalities before buyers should treat that exemption as fully in force. But the direction of policy is clear: Panama is concentrating its strongest housing incentives around the lower end of the owner-occupied market.

Mortgage feature	Qualifying new home ≤$120k	New home >$120k
Preferential interest available	Yes	Generally no
Banco General published rate example	~1.5%-3%	~7.5%
Maximum published financing	Up to 98%	Up to 95%
2% ITBI relief under recently approved Bill 661	Targeted strongly at this segment	Partial relief may apply above $120k
Overall financing advantage	Very large	Much smaller

Are used homes harder to finance than new homes in Panama?

Yes, a used home can currently be harder to finance than a more expensive new property that qualifies for Panama's housing subsidies.

Banco General advertises used-home mortgages at around 8% and finances up to 90% of the quick-sale appraisal value. Compare that with financing of up to 98% and rates around 1.5%-3% on qualifying preferential new homes.

Imagine a buyer choosing between a used apartment at $100,000 and a new qualifying home at $110,000. The cheaper property can require around $10,000 toward the purchase price under 90% financing, while the $110,000 new home could theoretically require only about $2,200 at 98% financing.

The used-home buyer can also face a much higher interest rate.

This is one of the stranger features of Panama's current mortgage system: the cheapest property is not necessarily the cheapest property to buy.

Does a good salary make getting a mortgage in Panama easy?

No, a good salary alone does not make mortgage approval easy in Panama because banks also care heavily about how much of that income is already committed elsewhere.

Panamanian lenders normally check employment records, Social Security contributions, payslips, tax returns when relevant and the applicant's APC credit history.

Existing debt can make a major difference. Credit cards, car loans and personal loans all consume part of the income a bank could otherwise allocate to a mortgage payment.

BAC provides a useful illustration in some of its lending criteria by referring to maximum payment capacity around 35% of gross salary, although each bank and mortgage product has its own underwriting rules.

Suppose two applicants both earn $2,500 a month. One has almost no other debt. The other already spends several hundred dollars each month servicing a car loan, cards and consumer credit. Their mortgage applications can receive very different answers even though their salaries are identical.

That helps explain why attractive advertised mortgage rates have not produced more approvals. Panama still has a household-level affordability problem.

Can self-employed people get a mortgage in Panama easily?

Self-employed borrowers can get mortgages in Panama, but the process remains more demanding because banks want a longer paper trail proving that the income is real and repeatable.

Banco Nacional asks independent borrowers for their two latest income-tax returns along with proof that the corresponding obligations were filed and paid. Banco General also requests two tax returns and supporting documentation from independent applicants. Similar requirements appear at other major banks.

A salaried employee can often establish income through an employment letter, recent payslips and Social Security records.

For a freelancer, business owner or independent professional, a strong recent bank balance usually does not replace several years of declared earnings.

The recent housing reforms have improved the cost of some mortgages, but they have not materially relaxed this part of underwriting. Self-employed buyers should still expect banks to scrutinize income consistency closely.

Is it easier for foreigners living in Panama to get a mortgage now?

Yes, foreigners with established residency in Panama can access far better mortgage conditions than foreign buyers who live abroad, and permanent residency can even open the door to preferential housing finance.

The preferential-interest regime allows qualifying foreign residents to benefit when the legal conditions are met, including requirements linked to the property being a primary residence.

Banks still ask foreign applicants for immigration documentation. Depending on the lender and applicant, that can include a valid passport, residency card and proof of legal employment or income in Panama.

Once those pieces are in place, an established resident can look much more like a domestic borrower from the bank's perspective.

Banco General also makes an important distinction around FECI. A principal-residence mortgage generally avoids the 1% FECI surcharge, while foreign clients without permanent residence can be required to pay it.

For mortgage access in Panama, residency status therefore matters more than simply having a foreign passport.

Can foreign non-residents get a mortgage in Panama now?

Yes, foreign non-residents can currently get mortgages in Panama, but they need far more cash upfront and should not expect the conditions offered to local first-home buyers.

Caja de Ahorros actively markets a mortgage specifically for foreign non-residents. Its current product offers financing of up to 70% and terms of up to 20 years.

That means a foreign buyer purchasing a $300,000 property may need at least $90,000 toward the price before transaction costs.

Documentation is also heavier because the bank needs to assess income and creditworthiness generated outside Panama. Foreign tax documents, bank references, proof of assets and overseas credit records can become part of the review.

The 30% equity requirement also gives the lender a much larger cushion if the borrower defaults.

So Panama remains financeable for overseas buyers, but the market is nowhere near the 95%-98% leverage available to some local or resident first-home buyers.

Buyer example	Maximum financing example	Cash toward a $300k purchase	Typical term
Resident regular mortgage at 90%	90%	$30,000	Up to 30 years
Resident regular mortgage at 95%	95%	$15,000	Up to 30 years
Caja de Ahorros foreign non-resident	70%	$90,000	Up to 20 years
Vacation/second-home financing around 70%-75%	70%-75%	$75,000-$90,000	Often 20 years

Are second homes and investment properties still hard to finance in Panama?

Yes, financing a second home or investment property in Panama remains much tougher than financing a subsidized primary residence.

Banco General currently advertises up to 70% financing for vacation homes, with an 8% nominal rate and a 1% FECI charge where applicable. Caja de Ahorros advertises up to 75% financing on its second-residence product, with terms of up to 20 years.

Those conditions immediately require much more equity. At 70% financing, a $250,000 property requires $75,000 toward the purchase price. At 98% financing, a qualifying primary residence would require only 2% of its value.

Investors also miss the main benefit Panama is using to support housing demand: the preferential-interest subsidy is aimed at owner-occupied housing rather than leveraged property investment.

Someone hearing that “mortgages are easier in Panama now” should therefore be careful. That statement fits a first-time resident buyer far better than someone purchasing a rental condo or beach property.

Has Panama finally fixed the mortgage-policy mess from 2025?

Mostly yes, and the regulation of the preferential-interest law makes today's mortgage framework much clearer than the one buyers faced during the transition.

More than 9,000 mortgage processes were reportedly affected when Panama moved between the old preferential-interest regime and its replacement. The confusion became serious enough that lawmakers had to introduce temporary measures and later amend the new framework through Law 481.

That law has been operating since the beginning of 2026. The government completed another missing piece in June with Executive Decree 23, which formally regulates Laws 468 and 481.

The Ministry of Housing also says the preferential-interest program now has no fixed expiration date. Previous versions repeatedly created anxiety around deadlines because developers and buyers could not be sure what conditions would apply by the time a project was delivered and the mortgage signed.

A separate obstacle may soon become smaller as well. Bill 661, approved in third debate in late August, aims to remove the 2% ITBI from the first $120,000 of qualifying new-home purchases. The measure was introduced precisely because the tax had become another upfront cost for households after the previous exemption disappeared.

There is still one weakness hanging over the system: the government acknowledged earlier this year that roughly $200 million remained owed to banks from past preferential-interest subsidies. That backlog deserves watching because banks ultimately need confidence that the state will reimburse the subsidized portion on time.

Still, the legal side of Panama's mortgage market is considerably less chaotic now than it was a year ago.

So, is it easier to get a mortgage in Panama now?

Partly yes. Panama has made mortgages noticeably easier for buyers of new primary homes up to $120,000, while the wider mortgage market remains expensive and selective.

The strongest improvement is easy to see. Preferential borrowers can find financing of up to 98%, published rates around 1.5%-3% at Banco General in qualifying brackets and terms extending to 30 years. The new preferential system has now been formally regulated, its recurring expiration problem has been removed, and another recently approved measure could cut the upfront transfer-tax burden on new homes.

The evidence becomes much less favorable outside that segment. Regular mortgages still commonly carry rates around 7%-8%. Used homes receive less generous financing. Second homes often require 25%-30% equity. A foreign non-resident using Caja de Ahorros can borrow up to 70%, which leaves a 30% contribution before other costs.

And the banking data still refuse to confirm a broad loosening. New preferential lending fell 34% during the first four months of 2026, while regular new mortgage lending fell 8%.

Our conclusion is sharper than a simple yes or no: Panama has rebuilt an unusually attractive path into homeownership for qualifying buyers near the bottom of the price market, but ordinary mortgage credit has not become broadly easy. Today, the difference between buying a $110,000 first home and a $200,000 apartment can mean entering two almost completely different financing systems.

Fact-checked and reviewed by our local expert

✓✓✓

Shai Bar-Ziv

Founder, Panavanti

Shai Bar-Ziv is the founder of Panavanti, a boutique real-estate brokerage in Panama City specializing in investment properties: commercial plazas, office buildings, and high-yield residential in Costa del Este, the Banking District, and Casco Viejo. He works directly with foreign investors in English and Spanish, backed by a continuously updated dataset of Panama City listings with zone-level pricing.

Who is the author of this content?

THE LATINVESTOR

A team specialized in real estate investing in LATAM countries

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Panama. If you’d like to learn more about us, you can check our presentation page.