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A Home Buyer’s Guide to Mortgage Loan in Nigeria


One reason most people get a mortgage to buy a home is that it makes the property more affordable. For many, it involves securing a mortgage loan.

In Nigeria, understanding the mortgage landscape can help you make informed decisions.

This guide will help you understand how mortgage loan works, from what a mortgage loan is to the top mortgage companies in the country.

What is a Mortgage Loan in Nigeria?

A mortgage loan is money borrowed to buy a home and the home is used as a guarantee for the loan.

In Nigeria, mortgage loans are primarily offered by Primary Mortgage Institutions (PMI), which are licensed by the Central Bank of Nigeria and accredited by the Federal Mortgage Bank of Nigeria (FMBN).

Key Terms to Understand

  • Mortgage: A loan used to purchase real estate, secured by the property itself.

  • Mortgage Rates: The interest rate charged on a mortgage loan.

  • Home Loans: Loans specifically for purchasing homes.

  • Interest Rates: The cost of borrowing money, expressed as a percentage.

  • Down Payment: The initial payment made when purchasing a home, usually a percentage of the total purchase price.

  • Equity Payment: Payments made towards reducing the principal balance of the loan, increasing ownership in the property.

  • Housing Delivery: The process of providing housing units to meet the demand.

Home loans

How Mortgage Loans Work in Nigeria

Steps to Obtaining a Mortgage Loan

  • Prequalification: Examining how much you can borrow based on your income capability and financial status.

  • Application: Submit an application to a Primary Mortgage Institution (PMI) with necessary documents.

  • Approval: The PMI evaluates your application and approves the loan if you meet their criteria.

  • Down Payment: Make an initial payment, typically between 20-30% of the property’s value.

  • Loan Disbursement: The PMI disburses the loan amount to the seller and you start making monthly payments.

Mortgage interest rates

Mortgage Rates in Nigeria

Mortgage interest rates in Nigeria can vary significantly based on the lender and the applicant’s creditworthiness. As of the latest data:

  • Average Mortgage Rates: Typically range between 18-25% per annum.

  • Factors Influencing Rates: Economic conditions, Central Bank policies and individual credit profiles.

Top Mortgage Companies in Nigeria

  • First Bank Nigeria (FBN) Mortgage: Known for competitive rates and flexible terms.

  • Union Homes: Offers a variety of mortgage products tailored to different needs.

  • Abbey Mortgage Bank: Focuses on affordable housing finance.

  • Federal Mortgage Bank of Nigeria (FMBN): Provides housing loans through the National Housing Fund (NHF) scheme.

Benefits of a Mortgage Loan

  • Real Estate Financing Solution: Helps you buy a home without paying the full price upfront.

  • Building Equity: Each payment increases your ownership stake in the property.

  • Long-Term Planning: Fixed interest rates offer predictable monthly payments.

Challenges and Considerations

  1. High Interest Rates: Mortgage rates in Nigeria are relatively high compared to other countries.

  1. Down Payment Requirements: The substantial initial payment can be a barrier for many buyers.

  1. Economic Factors: Fluctuations in the economy can impact mortgage rates and availability.


Securing a mortgage loan in Nigeria involves understanding various factors, from interest rates to the top mortgage institutions.

This guide aims to provide a comprehensive overview to help real estate clients make informed decisions when planning to buy a house.

Always ensure to compare different lenders and seek professional advice to find the best mortgage solution for your needs.

Read Also: Price Negotiation Tips for Property Purchase in Nigeria

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