Mortgage interest rates in Nigeria & How it Works

The mortgage interest rate in Nigeria! Are you seeking the mortgage interest rate in Nigeria? Do what to know what mortgage interest rate means. How mortgage interest rate in Nigeria works? Then you are in the right place for your search.

Mortgage interest rates can vacillate, depending on larger economic factors and investment activity. The secondary market also plays a role. Access to mortgages in Nigeria is primarily through banks, the Federal Mortgage Bank of Nigeria, and licensed primary mortgage institutions.

In this article, you will get to know how mortgage interest rates work in Nigeria, the mortgage interest rate in Nigeria 2022, how the interest rate is determined in Nigeria, and a whole lot of important updates on the mortgage interest rates in Nigeria.

What is the mortgage interest rate?

A mortgage interest rate is the percentage of your existing principal loan balance you pay your lender in exchange for borrowing the money to purchase a property. It’s not the same as your annual percentage rate (APR), which takes other costs, including your mortgage interest rate, into consideration.

Nigeria Mortgage Interest Rates 2022

Interest rates on mortgage loans in Nigeria range from 15% t0 25% per annum excluding fees and other charges. To put this into better context, the Subprime Mortgage Crisis of 5 years ago in the West was because Interest rates on Mortgages suddenly jumped from about 4% to 8% per annum leading to massive defaults.

So, in Nigeria if you take a Mortgage Loan of ₦25million at 15%pa interest rate you would have paid ₦37.9million in interest only over the 15year period!! That is even more than the Principal itself!!. The trick here is that at 15% interest rate, it takes a lender approximately 7years to recover the ₦25million it lent to you. That’s about 6 years if the interest rate of 20%.

Find below, mortgage rates for Nigerian banks and mortgage institutions for accessing mortgage loans to finance your personal and commercial real estate development.



Mortgage Lender NameMortgage Rate (%)Tenor (Up to)Maximum Amount
1Access Bank15 – 1730 yrsN500M
2Ecobank Nigeria10 yrs
3Standard Chartered Bank1520yrsN220M
4First Bank of NigeriaVariable20 yrsN50M
5United Bank for AfricaVariable20 yrsN70M
6FristTrust Mortage BankVariable15yrsN250M
7Guaranty Trust Bank(GTB)Variable20 yrsN150M
8Fed Mortgage Bank of Nigeria630yrsN15M



How does the mortgage interest rate work in Nigeria

Mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the lender in full.

Your mortgage interest rate is what it costs you each month to finance your property. It’s an amount you must pay to your lender in addition to paying off the amount that you’ve borrowed. Interest makes up part of your monthly mortgage payment. Your interest rate is effectively the lender’s compensation for letting you use its money to purchase your property

The requirement to get a mortgage in Nigeria

Anyone can apply for mortgages in Nigeria, provided you’re gainfully employed or earning an income.

Some requirements checked to get a mortgage in Nigeria includes:

  • Your monthly income
  • Your monthly expenditure
  • Your existing debt profile
  • The value of the property you want to be financed
  • Investigate if a mortgage is something you can afford

Getting mortgage loans is achievable with high performing rates in cities like Abuja and Lagos.

How is the interest rate in Nigeria determined

Traditionally, the interest rate is determined by the interplay of the supply of and demand for loanable funds. Savings is a major source (supply) of loanable funds while borrowing (investment) constitutes demand for loanable funds.

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