The short answer
To compare bank mortgages, use the total annual cost (CAT), which Banco de México defines to capture the full cost of a loan. Also check whether the rate is fixed, the minimum down payment, the term, origination and appraisal fees, insurance and early repayment terms. Get every quote in writing.
The interest rate is only part of what a mortgage costs. Two loans with similar rates can cost very different amounts because of fees, insurance or terms. This guide gives you a practical comparison checklist without recommending any particular bank.
What is the CAT and why does it matter?
The total annual cost is a standardized measure, expressed as an annual percentage, that rolls a loan's costs and charges into one figure for comparison. Banco de México publishes the method and a calculator. When you compare offers for the same amount and term, the CAT shows which one costs more overall.
Source: Banco de México: Calculadora del Costo Anual Total (CAT)
What else should you compare?
Beyond the CAT, review each component on its own, because each affects your monthly cash flow and flexibility.
- Fixed or variable rate, and whether it changes after a period.
- The bank's minimum down payment.
- Available terms and their effect on the installment.
- Origination, appraisal and credit-review fees.
- Life and property insurance, and whether you can buy it elsewhere.
- Penalties or freedom for early repayments.
How does the term affect the loan?
A longer term lowers the installment but raises total interest paid; a shorter one does the opposite. Many people choose a long term for breathing room and make principal prepayments when they can; check that the loan allows this without a penalty.
Source: Wikipedia: Hipoteca
Which documents will you need?
ID, proof of address, proof of income, bank statements and authorization to check your credit history. If you are self-employed, tax returns. Foreign residents can often get credit under extra requirements each bank sets.
More detail
Before applying, review your credit report and fix any errors. Several applications in a short time can show up on your record, so pre-qualify with simulators first.
What happens to the home as collateral?
With a mortgage, the house secures the loan until you pay it off. The bank orders an appraisal to set the value and the notary records the mortgage in the public registry. When you finish paying, the lien is formally released.
Source: Wikipedia: Hipoteca
Where can you learn more?
Profeco advises on consumer rights when buying a home, and Sociedad Hipotecaria Federal publishes information on the mortgage market. No source replaces reading the full contract before you sign.
Source: Profeco (gob.mx), Sociedad Hipotecaria Federal (gob.mx)
What should you do before applying?
Get your finances in order: pay down card balances, avoid opening new credit and gather several months of income proof. A clean history and low debt improve the offer you receive.
Then ask at least three lenders for quotes on the same assumptions and compare the full payment schedule, not just the first installment.
