Top 10 Mortgage Banks In Nigeria

What exactly is the Mortgage System?

Well, simply put, a mortgage is a loan that you take out to buy a house or other property. You borrow money from a bank or other lender, and then you pay it back over time with interest.

Now, there are different types of mortgages. The most common type is a fixed-rate mortgage, where the interest rate stays the same for the entire life of the loan. This can be a good option if you want predictable monthly payments.

Another type of mortgage is an adjustable-rate mortgage or ARM for short. With an ARM, the interest rate can go up or down over time based on market conditions. This can be a riskier option, but it can also be beneficial if interest rates are low when you first take out the loan.

When you apply for a mortgage, the lender will look at your credit score, income, and other financial factors to determine whether you qualify for the loan and what interest rate you will be offered. It's important to have a good credit score and a stable income if you want to get a good mortgage rate.

Once you are approved for a mortgage, you will make monthly payments to the lender, which will typically include both the principal (the amount you borrowed) and interest. You will also need to pay property taxes and homeowner's insurance, which may be rolled into your monthly payment.

Now, one thing to keep in mind is that if you don't make your mortgage payments on time, the lender can foreclose on your home, which means you could lose it. So, it's important to budget carefully and make sure you can afford your monthly payment before you take out a mortgage.

Mortgage Industry in Nigeria (Interest Rate)

The Nigerian mortgage industry has existed since 1956 when the Nigerian Building Society (NBS) was established. Now known as the Federal Mortgage Bank, renamed after the indigenization act of 1973 was passed.

In 1993, the Federal Mortgage Bank of Nigeria (FMBN) assumed the role of the apex mortgage bank in Nigeria and subsequently established the National Housing Fund (NHF) as a social savings scheme to gather funds for loans back to the contributors. 

Many financial institutions now offer mortgage loans as home loans with various repayment plans and varying interest rates with the average interest between 16% - 20%

Below we will look at the best banks in Nigeria to acquire mortgage loans.

Top 10 Mortgage Banks in Nigeria

How FMBN loan work

The FMBN, through the National Housing Fund, issues mortgage loans to individuals who have successfully maintained the mandatory equity contribution of 2.5% of their basic monthly salary for six months; the interest rate is currently at 6%.

The application and obtaining of the loan are done through accredited primary mortgage banks. Find out more and how to apply for a Federal Mortgage Bank loan here.

2. Nigeria Mortgage Refinance Company (NMRC): NMRC is a private sector-driven mortgage refinancing company established to provide affordable mortgage loans to Nigerians.

How it Works

This also doesn't involve a direct application to the NMRC but rather through subsidiary banks and partners. After applying for the loan through the subsidiaries, the NMRC refinances the loan while the borrower gradually pays back the capital and interest. Find out more about subsidiary institutions here.

How it works

Abbey Mortgage Bank is one of the subsidiaries refinanced by the NMRC and offers a maximum loan duration of 10 years. Check your eligibility here.

4. First Bank of Nigeria: First Bank of Nigeria is one of the oldest and largest banks in Nigeria, offering a wide range of banking products and services, including mortgage loans.

How to apply for First Bank's Mortgage loan

They offer up to 50 million naira in loans, a couple's mortgage plan, and only for the outright purchase of properties. You can start your journey here.

5. Stanbic IBTC Bank: a subsidiary of Standard Bank Group and one of the largest financial institutions in Nigeria. It offers mortgage loans and other banking products to Nigerians.

How to apply for Stanbic IBTC Home loan

This is one of the easiest mortgage applications in Nigeria, with a minimum obtainable loan of 3 million naira and a 20-year maximum repayment period. Find out more here.

Access bank home loan application

They offer a minimum 20% equity contribution maintained for at least 24 months and a repayment period of 20 years. Find out more here.

How it works

This is one of the oldest mortgage banks in Nigeria, established in 1994. They offer equity of 25%. To apply, start here.

How to apply.

One home is the mortgage subsidiary of Sterling Bank Plc. They offer mortgage loans and rent financing opportunities with a maximum mortgage repayment plan of 10 years. Find out more here.

How to apply

Imperial Mortgage Bank offers up to a 25-year repayment period with 20% equity and a maximum loan amount of 60 million naira. To apply, start here.

10. First Trust Mortgage Bank is a mortgage bank that provides mortgage financing and other real estate services to Nigerians. With a capital base of over 30 billion naira, they are well positioned on this list.

How to get a mortgage loan from First Trust Mortgage Bank

They offer various mortgage loans, from construction loans to outright purchases. They also offer a 20% minimum equity requirement, a 15-year repayment tenor, and the opportunity for a joint spouse mortgage.

How to get a mortgage loan in Nigeria

Visit any of the links provided above and check out your eligibility and requirements. If you are a match, start your application online or visit any of the bank's branches to talk to a staff member.

Overall, despite significant issues with the Nigerian mortgage system, efforts are being made to increase Nigerians' access to mortgage finance. 

The Nigerian mortgage system has the potential to improve in the future in terms of accessibility and affordability for all Nigerians with ongoing work and investments.

The high interest rates that make it impossible for the majority of Nigerians to afford mortgage loans are one of the problems with the country's mortgage system. 

Compared to other African countries, Nigeria ranks 41st in mortgage interest rates out of 54 countries.

To solve this, the government has established a variety of mortgage refinancing organizations to offer mortgage loans with more inexpensive long-term financing.

Another issue is the difficulty of registering and transferring land, as well as the absence of valid land titles, which can make it challenging for lenders to use the property as collateral for a mortgage loan. 

The government is attempting to resolve this issue by streamlining the land registration process and developing a more effective property transfer system.