How to buy your first property in Paraguay

A first home is almost never paid for in cash. Before you fall in love with a house, work out how much you can pay each month without strangling the rest of your finances. A prudent rule is to keep the loan instalment between 25 % and 30 % of your net monthly income.

Factor in the deposit too. In Paraguay, banks and finance companies usually ask for 20 % to 30 % of the property's value up front, though housing programmes from the Agencia Financiera de Desarrollo (AFD, the state development bank) allow smaller deposits on a first home. And do not forget the closing costs: the notary, transfer taxes and registration can add several percentage points to the price.

A mortgage is the most common route. The property is pledged as security until you finish paying. Terms usually run from 10 to 25 years, and rates depend on whether the loan is in guaraníes or dollars and on your credit profile.

The AFD is a second-tier bank: it does not lend to the public directly, it funds banks and cooperatives through lines such as «Primera Vivienda» (First Home), which offer more accessible rates and terms. Ask several institutions for quotes and compare the total cost of the loan, not just the monthly instalment.

The Paraguayan market runs on two currencies: properties in Asunción and its metropolitan area are mostly listed and negotiated in dollars, while the guaraní carries more weight in the interior and at the lower end of the price range. If you earn in guaraníes and borrow in dollars (or the other way round), you take on a currency risk worth measuring before you sign.

Large payments are made by bank transfer, almost never in cash: besides being safer, the financial system requires the origin of the funds to be documented in transactions of this size. Coordinate the timing of the transfer with your bank so the money is available on the day of the deed.