Countries › Mexico › Guide › 10. Capital markets and finance › Interest rates and loan terms in Mexico: free contractual rates, the 6 and 9 percent legal rates, no interest on interest, usury control by courts, early repayment, CAT disclosure and fallback reference rates

Interest rates and loan terms in Mexico: free contractual rates, the 6 and 9 percent legal rates, no interest on interest, usury control by courts, early repayment, CAT disclosure and fallback reference rates

Last verified: 2026-10-26 · Status: Stable

Parties to a commercial loan in Mexico may agree any interest rate, but courts must reduce rates that are notoriously excessive or usurious, applying the Supreme Court's 2014 binding precedent on promissory notes. If a commercial contract sets no default rate, the legal rate is 6 percent a year (9 percent under the federal civil code), and unpaid interest does not earn interest unless the parties later capitalize it. Financial entities must state rates in annual terms, agree fallback reference rates, charge interest only in arrears for the credits Banxico specifies, and show the total annual cost (CAT) in advertising and adhesion contracts.

USD conversions use MXN 18.6638 per US dollar, the US Federal Reserve H.10 noon buying rate in New York for 23 October 2026 (FRED series DEXMXUS), the latest observation available when this page was verified. Legal conversions in Mexico use the Banxico FIX, which differs slightly. Conversions are for orientation only.

Key facts

Commercial legal default interest rate	6 % a yearCódigo de Comercio art. 362, as of 2026-10-26 · in force
Civil legal interest rate (federal civil code)	9 % a yearCódigo Civil Federal art. 2395, as of 2026-10-26 · in force
Statutory interest rate cap	None; courts reduce usurious rates under 1a./J. 46/2014 and 1a./J. 47/2014 LGTOC art. 174; SCJN 1a./J. 46/2014 (10a.), as of 2026-10-26 · in force
Interest on unpaid interest	Not automatic; may be capitalized by later agreement in commercial matters, prior agreement void in civil matters Código de Comercio art. 363; Código Civil Federal art. 2397, as of 2026-10-26 · in force
Fallback reference rate required in financial entity loans	Yes LTOSF art. 9, as of 2026-10-26 · in force

The rule

1. Commercial default interest and compounding. Debtors who pay commercial debts late owe, from the day after maturity, the default rate agreed or, failing agreement, 6 percent a year; for loans of securities the default return is what the securities yield or 6 percent. Matured unpaid interest does not earn interest, but the parties may capitalize it. Accepting principal without reserving interest extinguishes the interest claim, and partial payments not expressly allocated go first to interest by maturity and then to principal.
Cost to do it: None.
Example: On a MXN 10,000,000 commercial debt paid 90 days late with no agreed default rate, default interest at 6 percent a year is MXN 150,000 on a 360 day basis (MXN 147,945 on 365 days). / MXN 147,945 is about USD 7,927.Código de Comercio, published in the DOF from 7 October to 13 December 1889, last reform DOF 14 November 2025 (Chamber of Deputies consolidated text), Arts. 362, 363 and 364, 1889-10-07 official text · verified 2026-10-26

2. Civil loans: 9 percent legal rate, judicial reduction, early repayment and no prior compounding. Under the federal civil code the legal interest rate is 9 percent a year; contractual interest may be higher or lower, but if it is so disproportionate that it suggests abuse of the debtor's need, inexperience or ignorance, the judge may on the debtor's request reduce it equitably down to the legal rate. If a rate above the legal rate was agreed, the debtor may repay principal after six months from signing, whatever the term, giving two months' notice and paying accrued interest. Agreeing in advance that interest will be capitalized and earn interest is void.
Cost to do it: None.
Example: A civil (non commercial) loan of MXN 1,000,000 at 24 percent signed on 1 January can be prepaid from 1 July with two months' notice. / MXN 1,000,000 is about USD 53,580.Código Civil Federal, DOF 26 May, 14 July, 3 and 31 August 1928, last reform DOF 14 November 2025 (Chamber of Deputies consolidated text), Arts. 2395, 2396 and 2397, 1928-05-26 official text · verified 2026-10-26

3. Promissory notes and the usury limit. For promissory notes, default interest runs at the rate stipulated for default, or else the note's ordinary rate, or else the legal rate. The Supreme Court's First Chamber held in binding precedent 1a./J. 46/2014 (10a.), registry 2006794 (Gaceta, June 2014, p. 400), from contradiction of criteria 350/2013 decided 19 February 2014, that this rule lets the parties agree interest freely subject to the limit that it is not usurious, and that judges must review this on their own motion and depart from a notoriously excessive rate; companion precedent 1a./J. 47/2014 (10a.), registry 2006795, lets the judge reduce it prudently. The Court's 2026 draft ruling in amparo directo en revisión 4046/2025 still applies both precedents and notes that the usury review must be done by the judge on its own motion.
Cost to do it: None.
Example: A note with 10 percent monthly default interest is at risk of judicial reduction even if the debtor never raised usury. / Not applicable.Ley General de Títulos y Operaciones de Crédito (LGTOC), DOF 27 August 1932, last reform DOF 26 March 2024; Supreme Court First Chamber jurisprudence 1a./J. 46/2014 (10a.) and 1a./J. 47/2014 (10a.), LGTOC art. 174, second paragraph, 2014-06-01 official text · verified 2026-10-26

4. Transparency duties of financial entities. Ordinary and default rates in credit documents and statements must be expressed in annual terms and highlighted clearly. When a reference rate is used, the entity must agree one or more substitute reference rates and their order in case the original disappears. Interest may not be charged in advance but only for elapsed periods, for the credit types and amounts Banxico specifies. Banxico sets the formula and method for the total annual cost (CAT), which must appear in advertising and adhesion contracts for the credits it covers, and issues rules on rates, fees and prepayments of banks and regulated SOFOMs.
Cost to do it: None.
Example: A loan priced at TIIE plus 3 points must name a substitute reference rate (and its priority) for the case TIIE stops being published. / Not applicable.Ley para la Transparencia y Ordenamiento de los Servicios Financieros (LTOSF), DOF 15 June 2007, last reform DOF 14 November 2025 (Chamber of Deputies consolidated text), Arts. 4, 8, 9, 10 and 15, 2007-06-15 official text · verified 2026-10-26

Situation	Rule	Source
Commercial debt, no agreed default rate	6 percent a year from the day after maturity	Código de Comercio art. 362
Civil debt, legal rate	9 percent a year	Código Civil Federal art. 2395
Interest on interest, commercial	Not owed unless the parties capitalize it	Código de Comercio art. 363
Interest on interest, civil	Prior agreement to capitalize is void	Código Civil Federal art. 2397
Usury	Judge reduces notoriously excessive rates on own motion	SCJN 1a./J. 46/2014 and 47/2014
Financial entity loans	Annual rates, fallback reference rates, CAT	LTOSF arts. 8 and 9

Legal interest rules in Mexico, verified 26 October 2026.

Worked example

A Mexican distributor owes a foreign supplier MXN 10,000,000 (about USD 535,797) under a commercial supply contract with no default rate.
It pays 180 days late. Default interest at 6 percent a year is MXN 295,890 on a 365 day basis, about USD 15,854 (Código de Comercio art. 362).
The unpaid interest does not itself bear interest unless the parties later agree to capitalize it (art. 363).
Had the contract set default interest at 8 percent a month, a court could reduce it as usurious on its own motion (SCJN 1a./J. 46/2014).

Step by step

1. Always agree a default rate in commercial contracts; otherwise you get 6 percent a year (Código de Comercio art. 362).
2. Keep default rates defensible against market references to avoid a usury reduction (SCJN 1a./J. 46/2014 and 47/2014).
3. Provide for capitalization of unpaid interest by a separate later agreement if you want compounding in a commercial loan (art. 363).
4. If you are a financial entity, express rates annually, add fallback reference rates and show the CAT where required (LTOSF arts. 8 and 9).
5. When receiving principal, reserve your right to unpaid interest in writing (Código de Comercio art. 364).

Common traps

Receiving principal without a written reservation of interest extinguishes the interest (Código de Comercio art. 364).
Unallocated partial payments go to interest first, which may leave principal larger than the debtor expects (art. 364).
Civil loans above 9 percent can be prepaid after six months regardless of the agreed term (Código Civil Federal art. 2396).
Judges review usury on their own motion, so a high rate is not safe just because the debtor did not complain (SCJN 1a./J. 46/2014).

Sources

← Secured lending in Mexico: the non possessory pledge, guarantee trusts, the movable collateral registry (RUG), priority and out of court enforcementFinancial consumer protection and credit bureaus in Mexico: CONDUSEF, the in house complaints unit, the two year complaint window, conciliation thresholds, credit bureau licenses, consent and 72 month data retention →