One of the things that we must go through as a universal rule is the acquisition of a real estate property, usually for housing purposes. However, this is one of the goods that exceeds in quantity the patrimony of many, so it is usual to turn to other sources of financing such as mortgages and leasing.

1. Definition of Mortgage

A mortgage loan is a form of financing for the purchase of real estate (including construction and remodeling) in which the buyer remains the owner, with the consideration that if the buyer defaults on payments, the financial institution may take actions on the property, such as sale and seizure.

2. Definition of Leasing

Leasing, on the other hand, can be understood as a lease contract in which the lessee has the option to purchase the property. However, in this case, the owner of the property is the real estate organization until the transaction is terminated. In the scenario that there is default of payments, people may be evicted after 3 months as normally happens in a lease agreement.

3. Differences

• In terms of property value coverage, leasing is able to finance 10% more than mortgages.
• The owner of the property in a mortgage is the buyer, in a lease it is the real estate entity.
• Interest rates on a leasing loan can generally be a few points lower than those of a non-VIS mortgage loan. In the case of VIS housing, the financial entity may finance up to 80% of the value of the property and the rates may even be lower than those of leasing.