Mortgages in Curaçao for non-residents: how does financing work in practice?

Anyone buying a home in Curaçao usually asks two questions. Do you have to take out a mortgage with a local bank? And if you do finance the purchase, how much of your own money will you need?

The short answer: a mortgage isn’t mandatory. But if you do want one, banks operate differently than in the Netherlands—especially when it comes to the loan-to-value ratio. And that determines how much of your own money you’ll need to contribute.

In this Burbach Roycroft Insights, we explain how financing works in practice for non-residents. We’ll cover important details, but we won’t lose sight of the big picture.

Then you are registered in the population registry (Kranshi). You have a Sedula (Curacao ID card) and a residence permit (or you were born there). You pay your income tax on the island. As a non-resident, you officially live and work abroad (for example, in the Netherlands). You do not have a Sedula and are purchasing the property as a second home, vacation home, or investment.

You can buy a home in Curaçao without a mortgage. Many transactions are funded with personal funds. The transfer is then handled by a notary, just as it is with a purchase involving financing.

If you do want to finance the purchase, there are roughly three options:

• Mortgage from a bank in Curaçao
• Financing outside of Curaçao
• Combination of a loan and personal funds

Which option makes the most sense depends less on what is “possible” and more on what fits your planning, security, and structure.

The main difference compared to the Netherlands lies in one key point: Dutch banks often finance up to 100% of the home’s value. Banks in Curaçao are generally more conservative.

You can see this immediately in the loan-to-value ratio. Simply put: the percentage of the home’s value that the bank is willing to finance.

In practice, you often see that banks tend to settle on 40% to 50%. This automatically results in a larger down payment.

This is a different system, which means you’ll want to calculate with realistic margins in advance.

Banks consider income and the property itself, but also the property’s marketability. This is particularly relevant for apartments.

Factors that are often assessed:

• The source and stability of income
• Existing financial obligations
• The property’s marketability
• Service fees and maintenance status (for apartments)
• Rental regulations (for resorts)

What this means is that the property itself influences approval. A good property with clear regulations often goes through the process more smoothly than a home with unclear rules or limited marketability.

It is important to have adequate insurance on the island. This is sometimes still underestimated by foreign buyers. Banks almost always require local life insurance. The underwriting process can be slow, and premiums are often higher than in the Netherlands.

Homeowners insurance is mandatory and must often be purchased through an insurer approved by the bank.

Although interest rates fluctuate, they are generally higher than in the Netherlands. These rates are usually fixed for short periods (such as 1 year, 3 years, or 5 years). The interest rate can even be variable, unlike the 20- or 30-year terms we are accustomed to in the Netherlands. This can also have advantages, for example, if the interest rate is higher when you take out the mortgage than it is after your fixed-rate period.

We’ve already discussed at length the down payment required when purchasing a property on the island. What we haven’t yet touched on are the additional costs. When taking out a mortgage, there are extra costs on top of the standard 4% transfer tax and 2% notary fees. The notary charges fees for the deed of conveyance and the mortgage deed.

In addition, banks often charge a 1% origination fee on the principal amount. You also have to pay stamp duty (a government tax on the documents).

If a property is located on leasehold land (often the case with government-owned sites), banks impose stricter requirements regarding the remaining term of the lease. Some banks prefer to provide financing only for properties on freehold land.

Many banks in Curaçao have a strict age limit for mortgage borrowers (often up to age 65). For retirees buying a second home, this means the mortgage term may be short, resulting in high monthly payments. Still, these costs are manageable for most people.

In Curaçao, you can’t really get a mortgage without opening a local checking account for direct debit. Opening an account as a non-resident is now a process in itself due to strict KYC (Know Your Customer) rules.

The success of a mortgage application depends entirely on the completeness of the application package. Banks often request a combination of personal documents, financial information, and property details.

Typical components include:

• Identification
• Income information (pay stubs or annual financial statements)
• Bank statements
• Tax return
• Purchase agreement
• Appraisal report
• Proof of personal funds

The latter, in particular, is often underestimated. Banks typically want to see proof of available personal funds in advance, not just right before the closing.

Many buyers plan based on the pace of things in the Netherlands. But the turnaround time is often different. Appraisals, document reviews, and compliance checks take time. Sometimes additional questions arise, especially if income is earned outside of Curaçao.

That is why it is wise to include a financing contingency in the purchase agreement that reflects the reality of the process—not just your wishes.

Not everyone wants or needs to secure financing locally. Some buyers choose to secure financing in the Netherlands, for example by tapping into their home equity. Others opt for a combination: part of the funds from their own resources, and part from a loan.

The advantage of a combination is often that it reduces the pressure of the process. You have greater certainty about the closing. You are less dependent on a single deadline.

Financing in Curaçao is quite feasible, even for non-residents. And a mortgage isn’t required to buy a home. However, those who do take out financing will almost always have to make a larger down payment than in the Netherlands. This is due to the loan-to-value ratio and the fact that banks often base their financing on the appraised value.

That’s exactly what you want to know in advance. Not to be put off, but to plan effectively and buy with confidence.

No. You can also buy a home without a mortgage. In that case, the transfer of ownership is handled by a notary.

This is because banks typically finance a smaller portion of the home’s value than they do in the Netherlands. As a result, you pay a larger portion of the purchase price yourself, plus additional costs.

Loan-to-value is the percentage of the home’s value that the bank finances. The lower this percentage, the higher your down payment.

This is because banks often base their loans on the appraised value. If that value is lower than the purchase price, you’ll have to cover the difference yourself.

Sometimes, but approval depends on your source of income, documentation, and the property. Banks often apply stricter criteria when evaluating foreign income.

This varies by case, but be sure to allow extra time for appraisal, file review, and compliance. Be sure to factor this into your purchase plan.

Identification, income information, bank statements, tax return, purchase agreement, appraisal report, and proof of funds.

Are you wondering if your specific situation qualifies for financing in Curaçao? Are you interested in one of our exclusive residential properties? Please contact us to schedule a viewing of the property. We’d be happy to make time for you.