Panama's Preferential Mortgage Law
Government-subsidized mortgage rates for first-home buyers up to USD 120,000. Here is who qualifies, how long the benefit lasts, and what changed under the 2025 reform.
Who qualifies
- Primary residence (first home)
- Sale price ≤ USD 120,000 including land + improvements
- Loan from a financial institution regulated by the Superintendency of Banks
- Buyer has not previously benefited from this law
- Residential use only
- Second or investment properties
- Property price above USD 120,000
- Commercial-use properties
- Buyers who previously used the subsidy
- Loans from non-regulated lenders
What Law 341/2025 changed
The reform took effect in January 2026 and modifies Law 468/2025 in three material ways.
Frequently asked questions
What is Panama's Preferential Mortgage Law?
A government benefit that subsidizes part of the mortgage interest for first-home buyers when the property price does not exceed USD 120,000. The government covers up to 85% of the interest offered by the bank, with a maximum preferential rate of 4% during 7 years. The governing regulation is Law 468/2025 with the reform introduced by Law 341/2025, in force since January 2026.
Who qualifies for the Preferential Mortgage Law?
Buyers of a first home (primary residence) for residential use, with a property price not exceeding USD 120,000 including land and improvements. Previously benefited persons, second homes and properties for commercial use are excluded. The loan must be issued by a financial institution authorized by the Superintendency of Banks of Panama.
How long does the benefit last?
Under the reform in force since January 2026, the benefit applies for 7 years, non-renewable. After that period, the buyer pays the full commercial rate offered by the bank. It is important to plan ahead, because the reform removed the prior requirement for banks to offer transition alternatives.
How much can I save?
It depends on property price, loan term and the rate offered by your bank. For a USD 100,000 property at 7.5% over 30 years with 10% down, monthly savings are around USD 150–200 and cumulative savings during the 7 years can exceed USD 12,000. Use the calculator (available in Spanish) to model your exact case.
Does the law apply to used homes?
The regulation prioritizes new homes. For specific cases of eligible used homes, check with your bank and a legal advisor before signing a promise to purchase. Eligibility is confirmed by the authorized financial institution based on requirements from the Ministry of Housing (MIVIOT) and the Ministry of Economy and Finance (MEF).
Can foreigners benefit from this law?
The Preferential Mortgage Law is aimed at resident buyers of first homes. Foreign buyers who are not residents typically do not qualify for the subsidy, but can still access regular mortgages from Panamanian banks (usually 60–70% LTV). Foreigners who hold Panamanian residency and meet the income and property conditions may qualify — confirm with a local banking advisor.
Model your savings
The interactive calculator with inputs for price, term and rate is currently in Spanish. Or talk to Santiago directly — he can model your case in minutes on WhatsApp.