Ask any working-class Nigerian what their biggest dream is, and you’ll likely hear: “I want to own my own house.”
Yet, despite the rise of estates across Abuja, Lagos, Enugu, and Port Harcourt, millions still struggle to make that dream a reality. The reason isn’t always about laziness or lack of ambition — it’s often because of the huge upfront cost of buying property.
Imagine earning ₦400,000 monthly and trying to save ₦30 million for a decent house. You’d need years, if not decades. That’s where mortgages come in — a system designed to make homeownership easier by letting you buy now and pay gradually.
But here’s the big question: Does mortgage really work in Nigeria? And if yes, how affordable and accessible is it?
Let’s unpack that — with facts, real examples, and actionable insights you can use.
What Is a Mortgage? (Simple Explanation)
A mortgage is simply a loan you take to buy a house, where the property itself serves as collateral.
Think of it like buying a car on installment — you make an initial deposit (called equity contribution), and your mortgage bank covers the rest. You then repay monthly over several years (often 10–30 years), with interest.
For example:
If you want to buy a house worth ₦30 million, and your mortgage provider asks for 20% equity, you’ll pay ₦6 million upfront while the bank covers ₦24 million. You’ll then repay the ₦24 million plus interest over the agreed term.
The home belongs to you — but the title stays with the bank until you finish repayment.
How Mortgage Works in Nigeria
Nigeria’s mortgage system is built around two main players:
- Primary Mortgage Banks (PMBs) – These are private or public banks that lend money directly to individuals (e.g., Abbey Mortgage Bank, Platinum Mortgage Bank, Infinity Trust Mortgage Bank).
- Federal Mortgage Bank of Nigeria (FMBN) – The government-backed institution that oversees and funds affordable housing loans, especially through the National Housing Fund (NHF) scheme.
Here’s the flow:
- Workers contribute 2.5% of their monthly income to the NHF.
- After a few years of consistent contribution, they can apply for a low-interest mortgage loan through an accredited mortgage bank.
- The FMBN provides the funds, while the mortgage bank handles the process.
Interest rates under NHF are currently around 6% per annum — one of the lowest in the country. Compare that to commercial bank home loans that range between 15–22% per annum.
That’s a big gap — and a big reason why many middle-income Nigerians should pay attention to the NHF route.
Who Can Apply for a Mortgage in Nigeria?
Eligibility depends on the type of mortgage (NHF or commercial), but generally, you must:
✅ Be a Nigerian citizen (18 years or older).
✅ Have a verifiable and stable income source.
✅ Contribute to the National Housing Fund (for NHF loans).
✅ Provide documents such as:
- Payslips (3–6 months)
- Bank statements (6–12 months)
- Employment or business verification
- Valid identification (NIN, passport, voter’s card)
- Property documents (C of O, building plan, etc.)
For self-employed individuals or entrepreneurs, it’s slightly more complex — you’ll need business registration (CAC), tax clearance, and strong cash flow records.
Popular Mortgage Banks & Plans in Nigeria (2025 Update)
Here are some of Nigeria’s most active and reliable mortgage providers:
1. Federal Mortgage Bank of Nigeria (FMBN)
- Interest Rate: 6% per annum
- Loan Tenure: Up to 30 years
- Max Loan Amount: ₦15 million
- Best For: Low- to middle-income earners contributing to NHF
2. Abbey Mortgage Bank
- Interest Rate: 14–18% per annum
- Loan Tenure: 5–20 years
- Max Loan Amount: ₦50 million+
- Best For: Salaried professionals and developers
3. Infinity Trust Mortgage Bank
- Known for fast processing and flexible repayment.
- Interest Rate: 12–18%
- Best For: Mid-income earners with verifiable income
4. Platinum Mortgage Bank
- Offers both NHF and commercial mortgages.
- Loan Tenure: Up to 30 years under NHF.
- Focused on civil servants and cooperative societies.
5. Access Bank Home Ownership Loan
- Available for salary earners.
- Competitive interest rate (around 18%).
- Max Tenure: 20 years.
Tip: Always compare mortgage offers based on effective interest rate (EIR), processing fees, and penalty clauses before signing.
Is Mortgage in Nigeria Affordable?
Now, this is where things get interesting.
On paper, mortgage sounds perfect — buy a house, pay gradually, no stress.
But in practice, affordability remains the biggest roadblock.
Let’s look at some data:
- According to the Central Bank of Nigeria, Nigeria’s housing deficit stands at over 22 million units.
- The average house price in major cities ranges between ₦20–₦50 million for middle-class areas.
- The average Nigerian salary (formal sector) is between ₦200,000–₦400,000/month.
So even if a mortgage bank offers you ₦20 million at 15% for 20 years, your monthly repayment might be around ₦250,000–₦300,000 — which is beyond the reach of most workers.
That’s why government-backed mortgages (like FMBN’s NHF scheme) are crucial.
At 6% interest, your monthly repayment on ₦15 million for 20 years would be around ₦107,000, which is far more manageable.
Still, awareness is low. Many Nigerians either don’t know about these schemes or assume they’re too complicated.
Why Many Nigerians Don’t Use Mortgages
- Low Awareness:
A 2023 survey by NOI Polls revealed that over 60% of Nigerians don’t understand how mortgage financing works. - High Interest Rates (Commercial Mortgages):
Most private mortgage banks charge between 15–22%, making repayments almost like rent. - Documentation Hassles:
Many potential homeowners don’t have a valid Certificate of Occupancy (C of O) or verifiable income, which makes them ineligible. - Distrust in the System:
Past experiences with government housing schemes or slow disbursements have made people skeptical. - Cultural Preference:
Nigerians traditionally prefer to “build at their pace” rather than owe the bank — even if that means living in an uncompleted building for years.
Real-Life Example: How a Young Professional Used Mortgage to Buy a Home
Let’s bring this home with a story.
Chidi, a 32-year-old engineer in Abuja, earns ₦450,000 monthly. Like many Nigerians, he always wanted to own a house but didn’t want to deplete his savings.
In 2022, he discovered the NHF mortgage program through his company’s HR. He applied through a Primary Mortgage Bank and qualified for a ₦12 million loan at 6% interest, repayable over 20 years.
He paid a 10% equity contribution (₦1.2 million), and after three months of paperwork, his loan was approved. Today, Chidi lives in his own 3-bedroom bungalow in Kuje, paying about ₦86,000 monthly — less than what he used to pay for rent.
His story proves one thing: mortgage can work in Nigeria — if you understand the system and play by the rules.
Step-by-Step: How to Apply for a Mortgage in Nigeria
Here’s a simplified guide for first-timers:
Step 1: Choose a Mortgage Bank
Start with accredited Primary Mortgage Institutions (PMIs) under FMBN. Ensure they’re licensed by the Central Bank of Nigeria (CBN).
Step 2: Check Your Eligibility
Are you employed or self-employed? Do you contribute to NHF? Do you have the required documents?
Step 3: Pay Equity Contribution
Depending on the loan, you’ll pay between 10–30% upfront.
Step 4: Submit Your Application
Attach documents like payslips, ID, tax clearance, and property details.
Step 5: Wait for Appraisal & Approval
Your bank will value the property and forward the application to FMBN or its own loan board for approval.
Step 6: Loan Disbursement & Property Handover
Once approved, the bank pays the developer or seller. You take possession, and repayment begins.
Alternatives to Traditional Mortgage
Not everyone will qualify for a mortgage — and that’s okay.
Here are other homeownership routes Nigerians are exploring:
1. Rent-to-Own Schemes
Pay rent monthly while gradually owning the property. Offered by FMBN and some developers.
2. Cooperative Housing Loans
Cooperative societies pool members’ funds to finance home construction collectively.
3. Developer Payment Plans
Some real estate companies (like MoonTech Real Estate) offer flexible installment plans — pay 10–30% upfront, spread the balance across 12–36 months.
4. Real Estate Investment Trusts (REITs)
Ideal for investors — buy shares in property portfolios and earn returns without owning physical houses.
What Needs to Change for Mortgage to Truly Work
For mortgages to become a reality for more Nigerians, several things need fixing:
- Lower Interest Rates:
Government and private banks need to collaborate to offer single-digit loans for first-time buyers - Simplified Documentation:
Property titling and verification should be digitized to cut approval time. - Public Education:
Awareness campaigns are needed to teach people how mortgage financing works and how to apply safely. - Policy Consistency:
Frequent policy changes discourage lenders and developers from long-term planning.
If these improve, Nigeria’s housing market could unlock trillions in value and finally close the housing deficit gap.
MoonTech Real Estate’s Take on Mortgage & Homeownership
At MoonTech Real Estate, we believe every hardworking Nigerian deserves a chance at homeownership — without being crushed by the weight of full payment upfront.
That’s why we design flexible property payment plans and work with verified partners to help clients explore both mortgage and installment-based ownership options.
Whether you’re a young professional trying to buy your first home or a seasoned executive planning your retirement property, our team helps you understand every financing option available — from NHF loans to private developer schemes.
Because at MoonTech, we don’t just sell land.
We help you own your space, your way
Conclusion: Does Mortgage Really Work in Nigeria?
The short answer is yes — but only if you understand it.
Mortgage isn’t a scam or a fantasy. It’s a financial tool.
And like every tool, its effectiveness depends on how it’s used.
For too long, the word “mortgage” has sounded too foreign, too complicated, or too expensive. But with rising housing needs and supportive government initiatives, it’s time more Nigerians started asking the right questions — not “Can mortgage work?” but “How can I make it work for me?”Your dream home might be closer than you think.
All it takes is the right information — and the right partner.
