CAT, Mexico's total annual cost of a mortgage

What the law says

The definition sits in article 2, section VI of the transparency law: the CAT is “el costo anual total de financiamiento expresado en términos porcentuales anuales que, para fines informativos y de comparación, incorpora la totalidad de los costos y gastos inherentes a los créditos, préstamos o financiamientos que otorgan las Entidades”. Two words matter: it is informative and for comparison. It is not an extra charge you pay, and it is not the rate used to compute your monthly instalment.

Article 8 gives Banxico, through general provisions, the power to set the formula, components and calculation method of the CAT, and to say which types and amounts of credit it applies to. I did not read Banxico’s circular that sets the formula, so this guide does not reproduce it; ask the lender for the CAT in writing and for the list of items it includes.

Where the CAT must appear

• Advertising and adhesion contracts. Article 15 of the same law says that for credits to which the CAT applies, advertising and standard-form contracts must carry it when the general provisions of PROFECO and CONDUSEF so require.
• The lender’s leaflet. Under article 5 of the Ley de Transparencia y de Fomento a la Competencia en el Crédito Garantizado (LTFCCG), a lender offering housing credit to the public must make available, free of charge, a leaflet that includes the ordinary and default interest rate and the CAT, the term, the amortisation system, early-repayment conditions, maximum commissions, and any services you must buy as a condition of the loan.
• The binding offer. Article 6 (section III) lists “la tasa de interés ordinaria, moratoria y el Costo Anual Total” among the minimum contents of the offer; see the binding offer guide.

A reference point: Banxico’s indicator

Banxico’s table CF303 reports, for August 2026, a CAT between 10.70 % and 28.18 % with a simple average of 13.78 %, for a reference loan: a 35-year-old borrower, a home of MX$1,000,000 in Mexico City, 20 % down payment, MX$800,000 financed over 15 years. The table’s note describes the indicator as summarising the total annual cost, covering interest, commissions, bonuses, mandatory insurance and charges for other financial services. More context is in mortgage rates in Mexico.

How to use the CAT when comparing offers

1. Ask each lender for a binding offer on the same amount, term and type of rate (fixed or variable), so the CATs are comparable.
2. Compare the CAT first, then the monthly payment, because a lower rate can come with higher fees. CONDUSEF’s consumer article (dated 2014, so an older page) makes the same point: the best interest rate “no garantiza el mejor financiamiento”, and it advises checking the opening commission and early-payment fees.
3. Check what is outside the CAT: the LTFCCG leaflet also lists federal and local taxes and other mandatory expenses for procedures and services provided by third parties, as approximate information separate from the lender’s own charges. Those are covered in closing costs in Mexico.
4. Remember that a CAT is only as good as its assumptions: a variable-rate loan’s CAT depends on a rate path that cannot be known in advance.

A short worked reading

Suppose two offers show the same loan amount and term. One has a lower interest rate but a higher opening commission; the other has a higher rate and no commission. Because the CAT folds fees and interest into one annual figure, the lower CAT is the cheaper offer on the assumptions used, even if its headline rate is higher. This is an illustration of the method, not data: no figures are implied. If the two CATs are close, look at the monthly payment, the early-repayment terms and the insurance, which the leaflet and the binding offer must list.

Which professional to consult

The mortgage lender must give you the CAT in writing; a real estate lawyer can read the contract against it. See mortgage lenders and real estate lawyers for how to check a registration yourself.