There’s a chance you know that there are mortgage banks in Nigeria, but you don’t think much about them. Let’s start with the basics: owning a home is generally a high-cost endeavour, but Nigerians historically prefer building their homes or buying outright. The kicker here is that both require deep pockets, and only a few who have this financial power can take on these projects.
Enter mortgage banks.
Mortgage banks exist to fill this financial gap, allowing low—to mid-income earners to own real estate that is ordinarily out of their financial reach. They could be particularly useful in Nigeria, where a housing deficit of 28 million units requires up to ₦21 trillion to fill.
In addition, mortgage banks in Nigeria serve as an alternative to home loans from commercial banks, where interest rates could be as high as 25% and payback periods much shorter. That said, mortgage loans are somewhat unattractive to end users because of the same interest rates, but other factors, including strict lending criteria, significant down payment requirements, and access to credit, affect the adoption of mortgage banks in Nigeria.
That said, there are about 32 primary mortgage banks in Nigeria, proving one thing: borrowers have multiple mortgage opportunities. The first critical step to considering a mortgage loan is to understand the scope of banks that give mortgage loans to borrowers.
So, what are the functions of mortgage banks?
Functions of mortgage banks in Nigeria
Mortgage origination
Mortgage banks in Nigeria give loans to people or businesses buying property. Part of this process is handling the paperwork, assessing credit, and ensuring compliance with regulations.
Simply put, their job is to connect borrowers with the credit they need to own a home, but they must verify critical details like income and credit history along the way.
Loan Underwriting
Mortgage banks want to ensure you’re safe from financial ruin. So, they look into your credit score, job stability, income, and the value of the property to see if you can handle the loan.
Talented underwriters ensure that only financially stable applicants get approved, reducing the risk of defaults.
Loan Servicing
Loan servicing is how mortgage banks manage your mortgage from start to finish. They collect payments, handle escrow for taxes and insurance, and address any questions you have. For banks that give mortgage loans in Nigeria, good loan servicing keeps everything running smoothly and ensures borrowers get the support they need.
Risk Management
It’s the mortgage bank’s job to protect itself from financial losses. They assess credit risk by checking borrowers’ ability to repay, manage interest rate risk by guarding against rate changes, and monitor market risks like shifts in property values or economic conditions. All these efforts ensure safe lending and investment.
Home Purchase Loans
Home purchase loans are a core service and functions mortgage banks in Nigeria serve to help people buy homes. These loans come with different terms and rates, giving borrowers options that fit their needs.
Home Improvement Loans
Home improvement loans from mortgage banks help homeowners fund renovations or upgrade their properties. These loans provide the cash needed to boost home value or enhance living conditions, from kitchen makeovers to roof repairs. Banks often release the funds in stages as the work progresses and may ask for proof of the planned improvements.
Equity Release Programs
Equity release programs from mortgage banks in Nigeria let homeowners access the value of their property without selling or moving. Whether through home equity loans or lines of credit, homeowners can unlock funds for debt consolidation or retirement planning while still living in and owning their homes.
Top 5 Mortgage Banks in Nigeria
Now that you have an idea of some of mortgage banks’ core functions with respect to risk assessment and home financing, let’s take a step further and look at a list of mortgage banks in Nigeria that effectively do this.
As we started earlier, there are about 32 primary mortgage banks in Nigeria, but a few rank higher for several factors, including their size, loan requirements, processes and operations, etc.
1. Infinity Trust Mortgage Bank
Equity contribution (Think of this as a downpayment. The amount of money you, as a borrower, need to pay upfront when getting the loan): 20% of property value.
Repayment period: Up to 20 years.
Since starting operations in 2002, Infinity Trust Mortgage Bank has become a market leader in the Nigerian mortgage industry and a publicly traded company. Under its mortgage loan scheme, the bank loans borrowers up to ₦100,000,000 to finance their homes and has provided this service to more than 10,000 Nigerian families.
In addition, the bank has a separate National Housing Funds Scheme designed for low—and mid-income earners (such as civil servants) who cannot afford the commercial housing loan product. For this category, they offer benefits including a 0 – 10% equity contribution, loans of up to ₦10 – ₦15 million, and a repayment period of up to 30 years.
Find out more about their products here.
2. Abbey Mortgage Bank
Equity contribution: 30% of property value.
Repayment period: Up to 10 years.
Founded in 1991 as Abbey Building Society PLC, the bank’s primary job was to connect potential homeowners with affordable housing solutions. Three decades later, Abbey Mortgage Bank is one of the largest and most profitable mortgage banks in Nigeria. It is also one of seven national Primary Mortgage Banks licensed by the Central Bank of Nigeria and the Federal Mortgage Bank of Nigeria (FMBN).
The bank’s mortgage product is available to Nigerian residents. Find out more about their services here.
3. FirstTrust Mortgage Bank
Equity Contribution: 20% for salary earners and 30% for the self-employed.
Repayment period: Up to 15 years.
One thing you need to know about FirstTrust mortgage bank is that its capital base and assets are over ₦36 billion, putting it in a prime position to be one of the strongest mortgage lenders in Nigeria.
Find more about the bank here.
4. Platinum Mortgage Bank
Equity Contribution: 20% – 30% for properties in liaison with the bank.
40-50% for properties not in liaison with the bank.
Repayment period: Up to 25 years (depending on the product).
Since 1992, Platinum Mortgage Bank has been providing loans to hopeful homeowners in Nigeria. The bank’s suites of products is built for individual needs—one is designed for borrowers who are looking to buy properties from the open real estate market, and another is for people who want properties marketed by the bank.
You should check out more about their products and services here.
5. Federal Mortgage Bank of Nigeria
This is the only government-backed on this list of banks that give mortgage loans in Nigeria. Since 1956, the bank has had the same the same objective as other mortgage banks in Nigeria: Making mortgages more accessible. Perhaps it is one of few banks with robust and specific mortgage servicing options. They include:
- National Housing Fund.
- Estate Development Loan.
- Home Renovation Loan.
- Rent-to-Own Scheme.
- Construction Loan
- Diaspora NHF Mortgage Loan.
Each product has specific benefits and requirements, so you should check them out before making a decision. This is an excellent place to start.
