Guide to Housing Financing in Colombia

How is housing financed in Colombia?

Colombia offers multiple mechanisms to finance new home purchases. You don’t need 100% of the money — with a combination of savings, credit, and subsidies, you can acquire your home with a down payment starting at 10% of the total value.

This guide covers the most common options and helps you identify which best fits your financial situation.

Mortgage credit (Crédito Hipotecario)

Mortgage credit is the most common way to finance housing in Colombia. Banks lend between 70% and 80% of the property value.

How does it work?

1. Pre-approval: the bank evaluates your payment capacity based on income, credit history, and debt level
2. Interest rate: can be fixed (doesn’t change) or variable (adjusts based on the DTF or IBR benchmark)
3. Term: generally 5 to 20 years, though some banks allow up to 30 years
4. Amortization system: Colombia uses UVR (inflation-adjusted) or fixed-peso systems

Required documents

• Employment letter with tenure and salary (max 30 days old)
• Income certificate or tax declaration
• Bank statements for the last 3 months
• Copy of identification document
• Bank application form

Tips for approval

• Keep your debt-to-income ratio below 40%
• Don’t open new credit cards or loans before applying
• Present documented additional income (rental, freelance, bonuses)
• Compare at least 3 banks — rates can differ by more than 2 percentage points

Housing leasing (Leasing Habitacional)

Leasing is an alternative where the financial institution buys the property and leases it to you with a purchase option at the end of the term.

Leasing advantages

• Lower down payment: from 10% of the value (vs. 20-30% for mortgages)
• Tax benefit: you can deduct lease payments from income tax
• Same term as mortgages (up to 20 years)
• Competitive rate: similar to mortgage rates

When does it make sense?

Leasing is especially useful if you:

• Have little savings for the down payment
• File income taxes and want the deduction benefit
• Prefer a lower initial monthly payment

Housing subsidies

Mi Casa Ya

The Colombian government program offers two main benefits:

Down payment subsidy:

• Up to 30 minimum wages (~$39 million COP / ~$9,750 USD in 2025)
• For VIS housing (up to 135 minimum wages) and VIP housing (up to 90 minimum wages)
• Requirements: income up to 4 minimum wages, not a current homeowner, no previous subsidy

Interest rate subsidy:

• Reduces your credit interest rate for the first 7 years
• Significantly lowers the monthly payment
• Can be combined with the down payment subsidy

Compensation funds (Cajas de Compensación)

If you’re affiliated with a compensation fund (Comfenalco, Cajasan, Cafam, etc.), you can access an additional subsidy:

• Amount varies by salary level (category A, B, or C)
• Can be combined with Mi Casa Ya
• Requires prior savings with the fund (generally 12 months)
• Some require a letter of intent from the builder

National Savings Fund (FNA)

The FNA offers mortgages with special conditions:

• Competitive interest rates
• Terms up to 30 years
• Contractual voluntary savings as a down payment mechanism

Down payment: how to build it

The typical down payment is 20-30% of the property value. Strategies to reach it:

Payment plan with the builder

Most builders, including PCG, allow you to pay the down payment in monthly installments from reservation to project delivery. This can be 12 to 24 months.

Severance pay (Cesantías)

You can use your accumulated severance pay as part of the down payment. You just need a letter from the builder indicating the property value.

Programmed savings

Saving a fixed monthly amount in a dedicated account is the foundation. With savings rates of 3-4% annually and discipline, you can accumulate the down payment in 2-3 years.

Additional costs to budget

Beyond the property price, consider these costs:

Item	Approximate percentage
Title transfer and registration	1.5 – 2.0%
Title study	$300,000 – $500,000 COP
Commercial appraisal	$300,000 – $600,000 COP
Notary fees	0.5 – 1.0%
Fire and earthquake insurance	Included in credit payment

General rule: budget an additional 3-4% above the purchase price to cover all associated costs.

Step by step: the complete process

1. Define your budget and calculate how much you can pay monthly
2. Check available subsidies based on your profile
3. Get pre-approval from at least 2-3 banks
4. Choose your home with pre-approval in hand
5. Reserve with the reservation fee (generally $1M-$5M COP)
6. Pay the down payment in monthly installments until delivery
7. Submit documents to the bank for disbursement
8. Sign the deed at the notary
9. Register the property at the Public Instruments Office

Need guidance?

At PCG Constructora, we accompany you from evaluating your purchasing capacity to handing over the keys. Contact an advisor or message us on WhatsApp for a no-obligation consultation.