According to the CBN website, there are around 35 licensed main mortgage lenders in Nigeria. These banks provide mortgage loans to individuals (particularly low-income earners and underserved groups) for a variety of real estate purposes.
This is due to people’s inability to buy a house with their earnings. It may take some time before this is finished if people save to purchase or build a home.
What is a Mortgage?
A mortgage is a loan in which real estate or property is used as security. Essentially, the customer enters into a deal with the lender to receive cash up front and repay it over a set period of time. Most lenders are banks.
Mortgage banks thus enter the fray to save the day. They can lend out real estate investment funds and accept payments in installments.
Speedy service delivery, inventiveness, and client satisfaction are some of the criteria considered to select the top 10 best Mortgage Banks.
In this special research, we will look at the top 10 Nigerian mortgage banks in no specific sequence that have set the pace and are currently holding the ace.
1. FirstTrust Mortgage Bank
(PMB) is a pioneer in the Nigerian mortgage banking market. They are well-positioned to help Nigerians safeguard their future through house ownership by providing innovative mortgage and real estate financing options.
FirstTrust has approximately ₦36 billion in assets and a rich history dating back to 2003.
Its property management team has over 100 years of experience between them.
The Bank’s items and offerings are carefully designed to meet Nigerians’ mortgage and financial needs.
They contribute to the accomplishment of the National Housing Policy by assisting people in their desire to gain stability through home ownership, allowing many people to have a tangible stake in the country’s development.
2. Infinity Trust Mortgage Bank Plc
Infinity Trust Savings and Loans Limited was established on January 28, 2002.
However, it began business operations in Abuja in 2003.
For more than a decade, Infinity Homes’ registered trademark has been a true expression of the company’s constant dedication to provide Nigerians with limitless prospects through reasonable house ownership.
As part of its strategic turnarounds the bank was transformed to a Public Limited
Liability Company on January 25, 2013, and its name was changed to Infinity Trust Mortgage Bank Plc.
As a result, on December 11, 2013, its shares were listed on the Nigerian Stock Exchange’s main floor through an introduction.
It was renamed National Mortgage Bank in 2014. Currently, the bank owns shares in the Nigeria Mortgage Refinance Company (NMRC).
Unquestionably one of Nigeria’s leading and best-capitalized primary mortgage banks. The bank has dramatically raised its the funds of shareholders from a negative position in 2004 to more over N6 billion.
The balance sheet grew too well than N16 billion from less than N100 million in 2004.
For fourteen years in a row, the bank has held an unbroken record of prosperity and dividend payments to shareholders, allowing over 10,000 Nigerian families to live comfortably and affordably.
Infinity Trust Mortgage Bank Plc has fully or partially funded no fewer than 20 contemporary estates in Nigeria.
3. CityCode Mortgage Bank Ltd
CityCode focuses on supplying affordable housing units to interested homebuyers or developers or cooperatives seeking a well-structured financing offer.
Furthermore, they keep their consumers informed of financial activity and give excellent client service. The bank remains stable, secure, and solid.
4. First Generation Mortgage Bank Ltd
First Generation Mortgage Bank Limited (FGMB) is a leading principal mortgage bank (PMB) in Nigeria that specializes in mortgage banking, personal banking, small business banking, and real estate development and financing.
The bank’s principal goal is to give its various clients with a diverse selection of innovative home financing solutions, value-added services, and goods that meet and exceed their financial requirements.
One of its milestones is the funding of approximately 5000 housing units.
First Generation Mortgage Bank Ltd was incorporated by the Corporate Affairs Commission on October 25, 1992, with registration document No. 207155.
It was licensed by the Federal Mortgage Bank of Nigeria to conduct mortgage banking in Nigeria under Mortgage Institute Decree No. 53 of 1989.
5. LivingTrust Mortgage Bank Plc.
LivingTrust Mortgage Bank Plc. is a significant primary mortgage bank (PMB) in Nigeria, regulated by the Central Bank of Nigeria’s Other Financial Institutions Department (OFID).
The bank was founded in 1993 as Osun Building Society Limited and then renamed Livingspring Savings and Loans Limited, with headquarters in Osogbo, Osun State.
It was founded to offer mortgage banking services, mortgage financing, real estate construction financing, and other financial services.
The name of the organization was then changed to Omoluabi Mortgage Bank Plc, and in 2014, its shares were listed on The Nigerian Stock Exchange’s Alternative Securities Market (ASeM), making it one of the initial to do so.
In 2019, CITITRUST Group invested in the bank and became the main stakeholder, paving the way for the bank to become more attractive and provide a wider range of services.
The Bank’s competence and promptness in responding to its clients’ needs make it the chosen provider of innovative and inexpensive mortgage goods and amenities, positioning us as Nigeria’s leading mortgage bank of choice.
They are also licenced by the Federal Mortgage Bank of Nigeria (FMBN) for the National Housing Fund (NHF) programme and a member of the Nigerian Mortgage Refinance Company Plc (NMRC).
6. Abbey Mortgage Bank
Knowing the realities of the problems many Nigerians experience on their path to home ownership, their company’s founder, Rose Ada Okwechime, embarked on a mission in 1991 to bridge the gap between well-meaning ‘hopeful homeowners’ and affordable accommodation solutions they sought.
This purpose influenced the bank’s founding mission –‘making homes happen’ – which established the company we have today.
Abbey is now one of only seven national Primary Mortgage Banks (PMB) regulated by the Central Bank of Nigeria and the Federal Mortgage Bank of Nigeria (FMBN).
In the recent reconstruction process that reduced the number of mortgage banks from 105 to 34, Abbey not only emerged effectively capitalized, but also rose to become one of the few that met the National mandate while being a public liability corporation.
Abbey continues to be an industry innovation in Nigeria’s mortgage business, delivering not only financial services but also retail and financial planning solutions, portraying itself as a one-stop shop for all domestic banking needs.
From its initial authorized share capital of N5 million, the bank has expanded to over N2.1 billion in share capital and raised our equity to more than N6 billion through capital infusion, bonus issuance, and successful trading.
They are currently one of Nigeria’s best-capitalized mortgage banks, with over 200 employees and ten (10) branches serving three areas nationally.
The bank’s industry leadership and innovation have resulted in significant wins, including recognition as the “Best Mortgage Bank in Nigeria,”.
Also, they are the first mortgage bank in Nigeria to receive foreign equity property investment through Africinvest Capital Partners, being rated by an independent rating agency in Nigeria, and being IFRS compliant.
Following three decades of success in simplifying mortgage, housing, finance, and investment for Nigerians, Abbey Mortgage Bank has been reimagined and repositioned for increased business development and productivity in a new world.
Positioned for the digital age, the new Abbey is outfitted with cutting-edge technology while remaining true to its original mission of “making homes happen” for all.
Our fresh approach welcomed a strategic relationship with the VFD Group, a formidable team of innovators and dynamic trailblazers who share our passion in using cutting-edge technology to provide tailored financial services and products to the most selective of consumers.
7. Cooperative Mortgage Bank
Cooperative Mortgage Bank Limited is CBN licenced and regulated, NDIC insured, FMBN controlled, and FDC accredited as a cooperators’ bank.
Their twin goals are significant: to bridge the gap in Nigeria’s supply of practical and long-lasting dwellings, as well as to provide structured financing to make home ownership easier.
The bank was established in 1994, with its headquarters in Ibadan and contact centres in Lagos and Abuja.
We have recently grown and extended to include more contact centres across the country.
Cooperative Mortgage Bank Limited has continually developed relationships with its clients by emphasizing the basics of excellent corporate governance, risk mitigation, leadership, and exceptional service.
The Bank provides a wide range of services, including mortgage banking, real estate construction financing, and financial advice services, with a concentration on cooperatives.
They are known as the Cooperators’ Bank since they conduct 95% of their business with unions.
The CFI named the bank the top mortgage bank in Nigeria in 2015, and the Nigeria Housing Award recognised its excellence in mortgage banking in 2020. likewise, the bank has contributed to the growth of estates in Lagos, Abuja, Port Harcourt, and Ibadan.
They take pride in being the cooperators’ bank, as our business purpose is to ensure that every cooperator, through their numerous cooperative organisations, becomes an individual with ease.
8. Haggai Mortgage Bank Ltd
Haggai Bank has always been destined for greatness. While the bank began as a finance firm in 1994, it was clear that the moves would extend beyond financing for corporations.
As a faith-based organization, the expansion into new territory was supported by more than just hunches and commercial plans.
Haggai Bank began offering mortgages in 2008. Since then, it has grown to become Nigeria’s biggest mortgage bank, with numerous international recognitions.
Because of its dedication to making home ownership simple, the pioneering mortgage company has sponsored eleven separate estates with diverse numbers of houses at the redemption camp, including two in Maryland, Lagos, and one in Abuja.
The bank is devoted to using its assets in order to guarantee that both mission members and non-members have access to adequate and suitable housing, while also acquiring clients and consumers across the country.
9. Platinum Mortgage Bank Ltd
Platinum Mortgage Bank was one of the first Primary Mortgage Institutions to achieve the CBN’s five billion recapitalization criterion, gaining it the designation of National Mortgage Bank in 2013.
Since its foundation, the bank has led the way in offering accessible and affordable housing options throughout Nigeria.
In its first five years of operation, Platinum Mortgage Bank financed the development of no fewer than twenty major housing estates across the country.
Also, they are also assisting many Nigerians with low and middle incomes in obtaining affordable loans to purchase homes through the National Housing Fund initiative and the opposite.
10. Homebase Mortgage Bank limited
Homebase Mortgage Bank Limited is a major mortgage bank established that offers first-rate mortgage financial services to specialists, public sector employees, corporate bodies/institutions, cooperatives, and their members, in addition to other individuals who are interested or organizations.
They provide mortgages that empower/enable their consumers to own homes and make assets that promote social stability, hence assuring building capacities on conditions that meet world-class standards.
In ten years, the bank expects its brand to be the clear choice for mortgages and houses in Nigeria.
Types of Mortgages
There are two sorts of mortgages in Nigeria: legal mortgages and equitable mortgages.
The method of establishing a legal mortgage in Nigeria is defined by the law applicable in the state where the property is located.
A legal mortgage is the more secure and extensive type of security interest since it transfers the mortgagor’s legal title in an asset to the mortgagee.
An equitable mortgage, on the other hand, entails the transfer of the mortgagor’s benefit interest in an asset to the mortgagee as security for obligation performance.
An equitable mortgage occurs when the formalities for establishing a legal mortgage have not been fulfilled or when the asset being mortgaged is solely an equitable interest.
1. Legal Mortgage
A legal mortgage is a highly secure and extensive type of security interest since it conveys legal title to the Mortgagee and prohibits the mortgagor from dealing with the mortgaged assets while they are subject to the mortgage.
The inclusion of legal interest in the construction of a legal mortgage mandates that the development document be Sealed.
2. Equitable mortgage
An equitable mortgage is the surrender of the borrower’s useful interest in an asset to the lender as protection for the performance of specific obligations, with the express or implied circumstance that such useful interest is retransferred when the secured obligations are released.
When just the benefit interest in an asset is transferred, an equitable (rather than a legal) protection interest is formed.
How Does Mortgage Banks Work in Nigeria
When you get a mortgage, your lender offers you a particular amount of money to purchase a home.
You agree to repay your loan with interest over a period of several years. You do not really own your home until the mortgage is paid off.
The interest rate is established by two factors: current market rates and the level of risk the lender takes in lending you money.
You can’t affect current market rates, but you can influence how the lender perceives you as a borrower.
The sum of money you can borrow is determined by what you can financially afford and, most significantly, the home’s fair market value, which is assessed through a valuation.
This is crucial because the lender is unable to lend more than the home’s evaluated Worth.
How to get mortgage loan in Nigeria
We’ve realized that some people wish to get a mortgage loan but don’t know how. Today, we will walk you through the straightforward 10-step process of obtaining a mortgage loan in Nigeria, regardless of your state of domicile.
1. Have a verifiable means of income
The first step in applying for a mortgage loan in Nigeria is to ensure that you have a traceable source of income.
One of the primary requirements that the mortgage bank will examine is that you have an earnings of income that will ensure repayments of the loan without defaults.
They would require account statements for the previous 6-12 months.
A mortgage loan applicant must have a verifiable source of income, as mortgage loans are long-term in nature, and the Bank wouldn’t like to process or accept a loan for someone who is without a way to repay it.
2. Possess a good credit report
If you want to qualify for a mortgage loan, you must first improve your credit score. No financial organization will lend to someone with poor credit rating.
If the applicant has previously accepted a loan from a finance company and defaulted on their this will harm the candidate’s credit score.
3. Search for a Property within your Affordability Range
Once you have a valid source of income and a decent credit score, the following step is to look for a house that fits your budget.
One of the most important things to consider while looking for a property is whether it has a valid title with which a legal mortgage can be issued, such as a Certificate of Occupancy, registered Deed of Assignment, and so on.
The title is extremely important since a defective title cannot be utilised to obtain a mortgage from a bank. When purchasing a house, it is recommended that you consult with your mortgage bank.
4. Review the Interest Rate
Infinity Trust Mortgage Bank Plc’s interest rates are very competitive, and we provide extended terms that make payments simple.
We can provide whatever amount required to purchase your desired property for as long as your earnings can cover the payback. Our equity commitment can be as low as 20% and paid out over time.
Aside from the appealing price, the customer interaction is also exceptional. Most traditional primary mortgage banks in Nigeria feature a functional loan calculator on their websites.
You can use the loan calculators to estimate your monthly amortization. It is crucial to note that the calculator will offer you a projected cost rather than an actual figure.
5. Save up your Equity
The amount of money you can give directly to the acquisition of a home is referred to as equity commitment.
When applying for a mortgage loan in Nigeria, one of the requirements is to provide equity.
Mortgage banks typically request equity contributions ranging from 20 to 50% of the property’s value, relying on the applicants’ reputation or the risk assessment of the candidate’s character.
So, if you intend to take out a loan to purchase a property, make sure you have some equity contribution. Some major mortgage banks in Nigeria offer specialized services to address this.
6. Consider All Other Charges
Before applying for a mortgage loan to buy a home, you should evaluate the median monthly spending. The maximum amount acceptable for payback should not exceed one-third of your net income.
You must examine all other costs associated with obtaining a mortgage loan, such as fees for administration, the cost of perfecting the legal mortgage, and so on.
These are some of the additional fees you will be expected to pay when applying for a mortgage loan. It is best to ask your account or loan officer what fees you will be expected to pay.
7. Start Collating all the Required Documents
Once you’ve decided to apply for a mortgage loan, you may begin gathering the necessary documentation.
Some documents that will be sought from you include: a 6–12-month income account statement, an offer letter from a seller or creator (i.e. the person who is in charge of the property you intend to purchase), a copy of your birth certificate or sworn affidavit, a copy of your hiring letter, a copy of your work ID, a copy of the title record of the property you intend to purchase, a letter of introduction from your company, etc.
These are some of the documents that will be requested from you throughout the application process.
8. Approach A Primary Mortgage Bank to Apply for the Mortgage Loan
After you’ve completed all of the steps stated above, approach a Primary Mortgage Bank of your choosing depending on your study. You is going to have to open an account, which requires the submission of two passport photographs, a valid form of identification (driver’s licence, national ID card, international passport or voter’s card), and a utility bill such as an energy bill, water bill, etc.
After successfully creating your account, you may begin the mortgage application process. When you rigorously adhere to the stages and standards outlined above, your loan gets finalized and you will be a property in no time.
9. Tighten up your belts
Switching from a full monthly paycheck to loan repayment takes a high level of financial discipline. Repayment can take 5-10 years or longer, according to your financial situation.
This requires you to be psychologically prepared and make some expenditure adjustments.
Taking on this task will require a great deal of devotion and hard work. However, the benefits are tenfold: seeing your family live well and having the products of your labour make an ultimate goal of mine.
10. Being free from debt
Once you’ve paid off your mortgage, you’ll be able to relax a little more and enjoy life. Consider travelling and doing things you enjoy. You can go on family trips and spend time developing together.
But of course, to be debt-free, pay your mortgage diligently.
Challenges associated with mortgage loan
1. Low Awareness
Many Nigerians are unaware about home mortgages, how to apply for them, and how to obtain them. Buying a property with a mortgage in Nigeria remains a misconception for the majority of people.
Furthermore, most commercial banks in Nigeria with a mortgage arm, such as First Bank, Guaranty Trust Bank, UBA, Access Bank, and others, rarely run big mortgage campaigns in the same way that they do for their businesses.
So, even some of their customers who bank with them are unaware that they offer Mortgages.
2. Strict Requirements
Mortgage institutions in Nigeria ask for all things and charge for it.
The bank continues to require you to confirm and verify data you supply, which is extremely amusing.
In Nigeria, there is no centralised tax or financial database system. It is tough for the average Nigerian to gather some of the documentation necessary to apply for a home Mortgage.
3. High Inflation and Interest Rate
The National Housing Fund Mortgage (NHF) offers an interest rate of six percent for up to 30 years (official rate; mortgage firms are known to add to that rate when the loan is disbursed).
Commercial mortgages typically charge 15% to 22% interest, which is highly high.
To clarify, consider an NHF mortgage loan of N15 million, payable over 15 years at 6% interest per year. After 10% equity (N1.5m), you must repay N20,505,560 (excluding insurance, mortgage deed, and other charges).
However, a commercial mortgage in Nigeria of N15 million is payable over 15 years. After 20% equity (N3m), at 18% interest per year, you’re supposed to pay back N34,785,000. I’m sure you’re twisting your head immediately.
4. High Risk
Off plan development provides another option for buying a house with a mortgage in Lagos and Abuja. Off-plan houses are projects that builders sell while the house is being built.
Furthermore, some off-plan developments in Lagos and Abuja might provide up to a two-year mortgage to stretch payments, permitting you to pay each month, quarterly, or at your own speed as the project progresses.
However, acquiring houses off-plan is dangerous because distribution might take time and may be slow, and while you’re buying the house in 3D, you don’t get a realistic sense of what the rooms or interior design would look like.
Frequently Asked Questions
How do I become eligible for a house mortgage financing?
Lenders in Nigeria may have varied eligibility criteria for mortgage loans in Nigeria for different types of borrowers because the range of things that can be financed in real estate is so diverse.
For example, the qualifying requirements for a single-family mortgage loan differ from those for a large retail centre mortgage loan.
Housing initiatives such as the National Housing Fund (NHF) and the Federal Mortgage Bank of Nigeria (FMBN) have the potential to change the qualifying requirements for mortgage loans in Nigeria.
However, regardless of the size of the loan, certain general standards must be completed. They include ● Age requirement:
What are the advantages of mortgage ownerships
The most significant advantage of a mortgage loan is that customers lack the obligation to transfer ownership of the property and can obtain the loan at very little interest, compared to most other types of loans.
Which bank is the best for mortgage loans in Nigeria?
Abbey Mortgage Bank Plc is Nigeria’s oldest and most lucrative non-aligned secondary mortgage bank.
It is one of seven National Primary Mortgage Banks (PMBs) licenced by the Central Bank of Nigeria and the Federal Mortgage Bank of Nigeria (FMBN).
