Buying or building a home in Nigeria is a dream for many, but without understanding how mortgage loans work, that dream can quickly become a financial burden.
In a market where interest rates vary widely (from 6% under the NHF scheme to as high as 18% with private banks), knowing
Knowing how to calculate a mortgage repayment gives you a powerful edge. It helps you understand the true cost of your home, compare lenders intelligently,
and avoid unexpected debt traps.
Most first-time buyers in Nigeria make one big mistake: they focus only on the loan amount or interest rate, without realizing
how tenure length, repayment structure, and down payment affect the total cost over time.
This guide solves that problem for you. You’ll learn:
- The exact formula for calculating a mortgage loan in Nigeria
- How to estimate monthly repayments using a free online calculator
- Real-life examples with breakdowns in ₦ (Naira)
- How to compare mortgage options from FMBN, Access Bank, Stanbic IBTC, and others
- Smart ways to reduce your total loan cost
Whether you’re applying for a Federal Mortgage Bank loan (NHF) or a private home loan, this guide will help you.
Calculate confidently, plan effectively, and borrow wisely.
What Is a Mortgage Loan in Nigeria?
A mortgage loan is a long-term loan from a bank or mortgage institution that allows you to buy or build a home while repaying it gradually over
10 to 30 years. Your property serves as collateral, meaning the bank can repossess it if you default.
Common mortgage providers in Nigeria include:
- Federal Mortgage Bank of Nigeria (FMBN), through the National Housing Fund (NHF)
- Commercial banks such as Access Bank, Stanbic IBTC, and Fidelity Bank
- Private mortgage institutions like Abbey Mortgage Bank and Platinum Mortgage
Tip: NHF contributors can access government-backed loans at interest rates as low as 6%.
💡 If you’re new to mortgages, check our detailed guide on How Mortgage Loans Work in Nigeria to understand the basics before you apply.
Why You Should Calculate Before Applying
- Affordability Check: See if your income can handle monthly payments.
- Avoid Overborrowing: Stay within your financial limits.
- Understand Total Cost: Know how much interest you’ll actually pay.
- Compare Banks: Different lenders offer different rates.
- Plan Better: Decide when to buy or save longer.
How to Calculate a Mortgage Loan in Nigeria
Mortgage calculations are based on three key factors:
- Principal (P): Amount borrowed
- Interest Rate (R): Annual rate divided by 12
- Tenure (N): Total repayment period in months
Example Calculation
Suppose you borrow ₦10,000,000 at 10% interest for 20 years.
R = 10 / 12 / 100 = 0.00833 N = 20 × 12 = 240 months EMI = [10,000,000 × 0.00833 × (1.00833)^240] ÷ [(1.00833)^240 – 1] EMI ≈ ₦96,500 per month
You’ll pay about ₦96,500 monthly for 20 years, totaling ₦23.16 million —
meaning ₦13.16 million goes to interest.
🔗 Try our Mortgage Loan Calculator to estimate your repayment.
Free Mortgage Loan Calculator (Nigeria)
Use the calculator below to instantly estimate your repayment.
Tip: Adjust tenure or rate to see how your payment changes instantly.
How Much Mortgage Can You Afford?
A simple rule: keep your mortgage repayment under 30–35% of your monthly income.
Example: If you earn ₦300,000 monthly, your ideal mortgage repayment should not exceed ₦105,000.
Compare Mortgage Providers in Nigeria
| Provider | Interest Rate | Tenure | Minimum Loan | Eligibility |
|---|---|---|---|---|
| FMBN (NHF Scheme) | 6% | Up to 30 years | ₦500,000 | NHF contributors |
| NMRC-backed Banks | 9–12% | Up to 25 years | ₦1M | Salaried & Self-employed |
| Stanbic IBTC | 10–14% | Up to 20 years | ₦2M | Verified income earners |
| Access Bank | 12–15% | Up to 15 years | ₦1.5M | Professionals & Workers |
Smart Tips to Reduce Your Mortgage Cost
- Make a higher down payment—borrow less, pay less interest.
- Choose a shorter tenure—save millions on long-term interest.
- Maintain a good credit record—banks reward trustworthy borrowers.
- Compare multiple lenders before deciding.
- Use NHF first—it offers lower, government-backed rates.
Frequently Asked Questions (FAQ)
Everything you need to know about mortgage loans, repayments, and home financing in Nigeria.
1. What is a mortgage loan in Nigeria?
A mortgage loan in Nigeria is a long-term financing option where a bank or lender provides funds to help you buy or build a house. The property itself serves as collateral until the loan is fully repaid.
2. How do I calculate my mortgage repayment in Nigeria?
You can calculate it using this formula: (P × R × (1+R)N) / ((1+R)N – 1), where P = loan amount, R = monthly interest rate, and N = total months.
Or simply use the Mortgage Loan Calculator embedded above.
3. What is the minimum down payment for a mortgage loan in Nigeria?
Most lenders require between 20% and 30% of the property value as a down payment. Under the Federal Mortgage Bank (NHF) scheme, it can be as low as 10%.
4. What is the typical interest rate for mortgage loans in Nigeria?
Interest rates vary between lenders. NHF offers rates around 6% per annum, while commercial banks can charge between 12% and 18%, depending on tenure and risk profile.
5. What is the maximum tenure for mortgage repayment?
The repayment period can range from 5 to 30 years. NHF and government-backed loans often offer longer tenures compared to private banks.
6. Who is eligible for a Federal Mortgage Bank (NHF) loan?
Nigerian workers (public or private) who contribute to the National Housing Fund for at least six months are eligible. They must also be at least 18 years old and have a stable income.
7. Can I apply for a mortgage loan without being a civil servant?
Yes. Several private banks like Access Bank, Stanbic IBTC, and GTBank offer mortgage loans to non-government workers, business owners, and entrepreneurs who meet income verification criteria.
8. What documents do I need to apply for a mortgage loan?
Common requirements include:
– Valid ID (NIN, passport, or driver’s license)
– Payslips or business income proof
– Property documents
– Bank statements (6–12 months)
– Tax clearance and utility bill
9. Can I pay off my mortgage loan early?
Yes, most lenders allow early repayment, though some charge a small penalty (prepayment fee). Paying early can reduce your total interest cost significantly.
10. What happens if I default on my mortgage loan?
Defaulting can lead to penalties, higher interest, or foreclosure, where the bank takes possession of the property. Communicate with your lender early if repayment challenges arise—many offer restructuring plans.
Conclusion: Plan Smart, Borrow Confidently
Understanding how to calculate your mortgage loan gives you control over your finances.
Estimate repayments, compare lenders, and plan with confidence, whether you use the NHF or a private bank.
🏡 Ready to begin? Use the calculator above to find out how much home you can afford today.