How to SUCCESSFULLY Get a Mortgage in Panama
You’re dreaming of your perfect home in Panama… ocean views, gentle breezes, and a glass of wine on the balcony. But then reality hits: How do you actually pay for it?
Getting a mortgage in Panama isn’t impossible — but it is full of secrets the banks don’t tell you. In this episode, we’re counting down the seven insider tips that could save you thousands — and make your dream home a reality.
#7: Life Insurance Is the Gatekeeper
Here’s something most people don’t realize: in Panama, you must get a life insurance policy to qualify for a mortgage. The policy protects the bank in case something happens to you — it’s their way of making sure the loan gets paid off.
But here’s where it can get tricky. Life insurance coverage in Panama usually stops at age 75. That means, if you’re 45 or younger, it’s possible to get a 30-year loan. But if you’re 65 now, you can only get a 10-year mortgage.
Not only that, but if you have a serious health issue that keeps you from qualifying for life insurance, the bank won’t approve your mortgage.
So, before you assume you can get a mortgage to pay for your ocean-view condo, check your age and health eligibility first — it’s the key that unlocks every other part of the mortgage process.
#6: Be Ready with a Bigger Down Payment
If you’re planning to get a mortgage in Panama, prepare for a little sticker shock on the down payment. For most foreigners, banks want you to put down 30 to 50 percent of the purchase price — and sometimes even more if it’s an investment property.
That’s because banks here see foreign buyers as higher risk, especially if your income or assets are outside of Panama.
Another key difference? The interest rate. A good rule of thumb is that your rate in Panama will usually be about 2% higher than whatever it is in the U.S. So if your U.S. mortgage is around 6%, expect to pay roughly 8% here.
It may sound steep, but remember — you’re buying in a stable, dollarized country with strong property laws and real assets behind every loan. And once you’re sipping that glass of wine overlooking the Pacific, you’ll see it was worth every penny.
#5: Use a Mortgage Broker — and Know the Rules
In Panama, getting a mortgage on your own can feel like running a maze blindfolded. That’s why most foreigners use a mortgage broker to guide them through the process.
A good broker knows which banks work best with expats and can save you weeks — or even months — of frustration. But here’s what you need to know: brokers charge fees up-front in milestones, and those fees are non-refundable.
For example, you’ll pay a small application fee to get started. This is typically five hundred to a thousand dollars. Then, once the broker secures a funding letter from the bank — kind of like a pre-approval letter— there’s a larger payment due. But even with that letter in hand, things can still fall apart before the final funding. Maybe they will find something in your credit history that they didn’t find the first time… or maybe you don’t pass your physical for the life insurance policy.
So, before you start, make sure you understand the broker’s payment stages and your risks. A good mortgage broker is worth every dollar — just go in with your eyes wide open.
#4: Don’t Forget the Paperwork
If you think getting a mortgage in your home country takes a lot of paperwork, wait until you see Panama’s list. You’ll need copies of your passport, a second form of ID, such as a drivers license, a recent utility bill with your name on it, bank reference letters that are signed and dated, tax returns for the past two years, and proof of income or assets.
It’s not hard — but it’s thorough. Panama’s banks want to make sure you’re financially stable before lending to you.
Here’s my insider tip: start collecting your paperwork early. Having it ready when your broker asks for it can speed things up and make you look like a rock star borrower.
#3: Consider Easier (and Sometimes Cheaper) Financing Options
A traditional bank loan isn’t your only choice — and sometimes, it’s not even your best one.
If you’re an American buying an investment property, you can use a self-directed IRA to fund the purchase. Just keep in mind that you can’t live in the property yourself, and it must be professionally managed.
You could also tap into a home equity loan from your property back home — often at a lower rate than a Panama bank would offer.
Or, if you’re buying directly from a developer, ask if they offer developer financing. It’s usually about 5 years, but it can bridge the gap while you sell assets back home.
In short — there’s more than one way to buy your slice of paradise.
#2: Read the Fine Print — Seriously
This part isn’t glamorous, but it’s important. Before you sign anything, make sure you understand every clause in your loan. If you do end up getting a loan from a Panamanian bank, the loan documents will be in Spanish. Be sure to translate the loan documents and understand every part of it before signing your name.
For example:
- Can you make extra payments without a penalty? Some banks in Panama charge fees if you pay off your loan early.
- What happens if you’re late one month? Will the bank bump up your interest rate?
Be aware that in the early years of your loan, most of your payment goes toward interest, not principal — that’s just how the math works here.
To summarize…A little bit of homework NOW can save you from expensive surprises later.
#1: Think Beyond the Loan — Plan Your Long Game
Getting approved for a mortgage is exciting, but it’s just the beginning. Before you sign on the dotted line, take a step back and look at your long-term plan.
How long do you plan to keep the property? Is it for investment, part-time living, or your forever home?
If you’re older and your loan term is shorter, make sure you’re comfortable with the monthly payments — and that you’ve got a plan if your situation changes.
Also, budget for the extras: homeowners insurance, loan-related life insurance, property taxes, HOA fees, and regular maintenance.
If you’re using short-term developer financing, have a clear exit strategy — whether that’s refinancing with a bank later or selling the property before the term ends.
Your mortgage should support your dream life, not control it. So think long-term, plan smart, and buy with confidence.
Banks that Offer Mortgages to Expats
Here are three Panamanian banks that are known to offer mortgage financing to non-resident expats (including U.S. citizens) — along with their official websites so your audience can explore further: Casa Solution+2businesspanama.com+2
- Banco General – Panama’s largest and most established bank, regularly listed among the lenders that work with non-resident foreigners on mortgage loans.
🌐 https://www.bgeneral.com - Banistmo – A major Panamanian bank (part of the Bancolombia group) that frequently works with expat borrowers and offers property financing programs. As of late 2025, they are in the process of being sold. They are currently part of the Bancocolombia Grooup to Inversiones Cuscatlán Centroamérica. Be sure to ask if they are going to continue lending while this sale goes through.
🌐 https://www.banistmo.com - Davivienda Bank (Formerly Scotiabank Panama) – Scotiabank was a well-known bank for expats. The strategic merger with Banco Davivienda was announced on January 6, 2025, and was finalized on December 1, 2025.
🌐 https://www.davibank.pa/es/banca-personal.html www.davibank.pa/es/banca-personal.html - Bi Bank - They are actively searching for North American clients, but they have very specific requirements. Mortgages only apply to properties valued above $250,000 and they will require a down payment of 50% if your income is received outside of Panama. Their interest rates start at 7.5%. You can contact Katherine Cruz at +507-308-800 ext. 98209. She speaks English.
Closing
Getting a mortgage in Panama can feel complicated at first, but now you know the key steps — from understanding life insurance requirements to choosing the right financing and planning your long-term strategy.
How to get a mortgage is one of the most asked questions by people just like you — investors, retirees, and dreamers who are thinking about building a new life in Panama.
And the good news? You don’t have to figure it out alone. We’re here to help. Just go to ChoosePanama.com/contact and schedule your free 30-minute call. We’ll help you review your options and find a property that fits both your lifestyle and your finances — so your Panama dream becomes your Panama reality.