Financial glossary

What the terms you'll run into when applying for a loan or comparing cards in Mexico actually mean. No jargon dressed up as plain language.

Consumer credit

  • CAT (Costo Anual Total) — The CAT adds together the interest rate, fees, mandatory insurance and, where applicable, VAT, expressed as an annual percentage. Banxico created it so…
  • Weighted Average CAT — The representative CAT that CONDUSEF publishes every six months by bank and product. It reflects what most customers were actually charged…
  • Interest rate — The price of money, expressed as an annual percentage. A 28% annual rate on 50,000 pesos over 24 months doesn't mean paying 14,000 a year — the…
  • Amortisation — How each monthly payment is split between interest and principal. At the start of the loan most of the payment goes to interest; by the end…
  • Early payment — Paying down principal ahead of schedule. In Mexico most personal and payroll loans allow early payments without penalty; mortgages tend to…
  • Bank fees — Charges on top of interest: origination, annual fee, account maintenance, card replacement, late payment. CONDUSEF keeps a public registry…

Credit cards

  • Interest-free days — The window between your statement cut-off and your payment due date during which no interest accrues, provided you pay the full balance. On…
  • Minimum payment — The least you can pay to avoid going into default. Usually 5% to 10% of the balance plus that month's interest and fees. Paying only the…
  • Months without interest (MSI) — An instalment plan with no interest added to the purchase price. The retailer funds it, not the bank — which is why you see it at big…
  • Credit line — The maximum amount the bank lets you use on your card. It's based on your verifiable income, your file at Buró de Crédito and your prior…
  • Cashback — A rebate (usually credited to the card balance, not paid in cash) on a percentage of what you spend. In Mexico it runs from 1% to 5% and almost…
  • Annual fee — A flat yearly charge on many cards. Ranges from 0 pesos (no-fee cards) to over 9,000 on premium tiers. A 1,800-peso annual fee is only…

Mortgages

  • Mortgage — A long-term loan to buy a home, with the property as collateral. In Mexico terms run 5 to 30 years. Private banks charge between 9.5% and…
  • Down payment (enganche) — The share of the property price you put up at signing. Minimum 10% with banks, sweet spot at 20–30%. The bigger the down payment, the…
  • Cofinavit — A hybrid Infonavit + bank scheme: you combine your housing sub-account with a bank loan to reach the amount you need. Useful when your…
  • Fixed rate vs variable rate — A fixed rate doesn't move over the life of the loan; a variable rate is repriced periodically against a benchmark (TIIE, Cetes). In…

Credit bureau and score

  • Buró de Crédito — Mexico's best-known credit bureau. It records your payment history with banks, telecoms, department stores and utilities. It isn't a…
  • Círculo de Crédito — Mexico's other credit bureau, owned by Banco Azteca, Famsa and Coppel. It leans toward the retail sector and customers without a…
  • Mi Score — A numeric score between 300 and 850 that predicts how likely you are to pay on time. Good score: 700 and up. A premium card needs 720+…
  • Hard pull vs soft pull — A hard pull happens when you formally apply for credit and the lender reviews your file — it temporarily drops your score 5–15 points…

Regulators and laws

  • CONDUSEF — National Commission for the Protection and Defence of Financial Services Users. Handles complaints against banks, SOFOMs and insurers…
  • CNBV — National Banking and Securities Commission. The regulator that licenses, supervises and, where warranted, sanctions banks, regulated SOFOMs…
  • Banxico (Banco de México) — The central bank. Sets the reference rate (the one that moves everything else), regulates payment systems like SPEI, publishes the FIX…
  • SOFOM — Sociedad Financiera de Objeto Múltiple. They lend without being a bank. Some are regulated (SOFOM ER, supervised by CNBV) and some aren't…
  • Fintech Law (2018) — The Law to Regulate Financial Technology Institutions, in force since March 2018. It created two figures: ITF (crowdfunding…

Macro and money

  • TIIE — Equilibrium Interbank Interest Rate — the cost at which banks lend to each other. Banxico calculates it daily. It's the benchmark…
  • Cetes — Federal Treasury Certificates: Mexican government debt at 28, 91, 182 or 364 days. You buy them from 100 pesos at cetesdirecto.com with…
  • Repayment capacity — How much of your free income you can put toward debt without drowning. The banking rule of thumb is not to spend more than 40% of net…

Insurance

  • SOAP (mandatory car insurance) — Mandatory third-party liability insurance for every vehicle on Mexico's federal road network. Covers damage to others, not your car…
  • Comprehensive cover — The full package: own damage, total theft, extended liability, medical expenses for occupants and roadside assistance. Two or three times…