Mortgage Interest Rate in Nigeria: How to Get the Best Deal

As of late 2025, Nigeria’s mortgage market remains fraught with high borrowing costs and limited uptake. But what can prospective homebuyers expect in 2026? In this guide, you’ll find the most current mortgage interest rates, how they’re determined, projections for 2026, key banks and government options, tips to get the lowest rate, and mistakes to avoid.

Whether you’re just trying to understand current rates or actively looking to apply for a mortgage, this article covers all bases — from comparing banks to understanding how CBN policy (MPR) and NMRC influence mortgage rates.

💡 If you’re new to mortgages, check our detailed guide on How Mortgage Loans Work in Nigeria to understand the basics before you apply.

Current Mortgage / Lending Rates in Nigeria

To ground expectations for 2026, it’s helpful to see where things currently stand:

• The Central Bank of Nigeria (CBN) held its Monetary Policy Rate (MPR) at 27.50% in multiple meetings in 2025.

• In September 2025, the CBN made a cut of 50 basis points to bring the MPR from 27.50% to 27.00% — the first policy rate cut since 2020.

• Commercial bank lending (prime) rates have been in the ~17–19% range. As of March 2025, Nigeria’s prime lending rate was ~17.96%.

• The broader “lending interest rate” (average bank lending) in Nigeria was reported at ~14.01% in 2023, though that is a historical average and likely lower than actual mortgage rates.

• More recent data show lending rates climbing: in August 2025, the lending rate was ~18.88%.

Because mortgages are long-term, banks will charge premiums over base lending rates to cover risk, inflation, property issues, etc. So, typical mortgage interest rates in 2025 (commercial mortgages) are often in the 18% – 25% range, depending on bank, location, credit profile, and tenure.

So, for 2026, these are your benchmark reference points.

How Mortgage Interest Rates Are Determined in Nigeria

To understand how the rates move (and why they might change in 2026), you need to know the levers behind them:

a) Central Bank Policy (MPR, CRR, Liquidity)

• The CBN sets the Monetary Policy Rate (MPR), which influences the base cost of borrowing for banks.

• Cash Reserve Ratio (CRR) and liquidity requirements force banks to hold more reserves, which can compress their lending capacity and push up rates.

• When inflation is high, the CBN tends to keep rates elevated to curb demand. If inflation cools, the CBN gains flexibility to cut rates.

b) Inflation & Exchange Rate Risks

• Nigeria has been grappling with high inflation (food, energy, imported goods). Because lenders must protect against the erosion of real returns, mortgage rates include buffers for inflation risk.

• Currency devaluation or volatility affects the cost of imported inputs and construction materials, which also feed into mortgage pricing.

c) Borrower Creditworthiness

• Banks assess borrowers’ credit history, income stability, loan-to-value ratio, and debt burden. Stronger profiles get better rates or lower risk premiums.

d) Property Type, Location & Valuation

• Mortgages for properties in high-value or stable areas, or those with good title, may attract slightly lower margins.

• For development or off-plan mortgages, banks may perceive higher risk and charge more.

e) Role of NMRC & Government Backing

• The Nigeria Mortgage Refinance Company (NMRC) was created to provide long-term liquidity to primary mortgage lenders and reduce interest rates via refinancing.

• Government-backed schemes like NHF (National Housing Fund) offer subsidized interest rates (~6%) to eligible contributors.

• Regulations (Mortgage Institutions Act, CBN guidelines) also influence how mortgage institutions operate in Nigeria.

Because of all these levers, mortgage interest rates in Nigeria are seldom static, and adjustments reflect macro shifts, policy changes, and risk perceptions.

Best Banks & Mortgage Providers in Nigeria

If you’re shopping for a mortgage in 2026, here are some of the leading banks and their strengths (with caveats):

Niche / Best Use Cases:

• If you’re an NHF contributor (public service, formal sector), the FMBN/NHF scheme is often the lowest-cost route.

• If you have strong income and credit history, commercial banks like Access, Stanbic, and First might offer competitive rates — but expect margins in double digits.

• If a bank’s mortgage is NMRC-refinanced, that often means better rate stability and lower risk margins.

Tip: When looking up any bank’s mortgage offer, ask: Is it NMRC-refinanced? That often leads to lower margins.

🔗 Related: NHF Loan vs Bank Mortgage Loan — compare both to decide which is best for your home financing needs.

Government & Subsidized Mortgage Options: NHF & NMRC

These are critical if you want to mitigate the high commercial mortgage rates.

National Housing Fund (NHF) Scheme

• NHF is a government initiative whereby formal-sector workers contribute a small portion of their income to a housing fund.

• Qualified contributors can access subsidized mortgage rates, sometimes as low as ~6% (for eligible NHF participants).

• There are usually income, employment, and document eligibility criteria.

Nigeria Mortgage Refinance Company (NMRC)

• NMRC’s role is to refinance mortgages given by primary mortgage institutions (PMIs) or banks, offering long-term liquidity at favorable rates.

• By absorbing the long-term risk, NMRC helps lenders reduce the interest margin they charge.

• Mortgages backed by NMRC tend to have more stable rates and lower spreads over benchmark lending.

Policy / Regulatory Influence

• The CBN and government periodically introduce housing policy initiatives (tax incentives, subsidies, infrastructure support) to influence mortgage affordability.

• Mortgage Institutions Act, CBN guidelines, and oversight ensure transparency, consumer protection, and uniform rules.

Thus, using NHF + NMRC schemes can significantly lower your effective interest rate compared to purely commercial mortgages.

Mortgage Interest Rate Projections & Scenarios

To make this guide forward-looking, here are plausible 2026 projections and scenario-based estimates, based on current macro trends and forecasts.

a) Macro & Monetary Outlook

• Analysts believe Nigeria’s interest-rate hiking cycle is likely over, and have projected cuts in 2025. For example, Capital Economics expects the policy rate to fall by ~400 basis points to 23.50% by year-end 2025.

• If inflation continues to moderate and the naira stabilizes, the CBN may be more aggressive in cutting MPR in 2026.

b) Projection Scenarios

So in 2026, a reasonable expectation is commercial mortgage rates somewhere between 16% – 22%, in the baseline scenario, for creditworthy borrowers in prime locations. But with favorable policy, lower inflation, and strong demand, certain NMRC-backed or subsidized schemes could push rates down into the 10–14% band for qualifying borrowers.

Caveats / Risks to the forecast:

• High inflation or currency shocks could force CBN to pause cuts or reverse.

• Fiscal slippages or loose government spending can reignite inflation.

• Global interest rate cycles and capital flight risk can pressure rates upward.

• Credit risks, nonperforming loans, or banking sector stress could widen margins.

Thus, this forecast is a forward-looking estimate, not a guarantee, but useful for planning.

See also: How to Apply for a Mortgage Loan in Nigeria for a full document submission checklist.

How to Get the Lowest Mortgage Interest Rate

To position yourself to benefit from the lower end of mortgage rates, follow these strategies:

1. Strengthen your credit profile

   • Maintain a clean repayment history.

   • Lower your debt-to-income ratio.

   • Avoid late payments or defaults.

2. Use NHF / NMRC-backed lenders

   • If eligible, apply under NHF programs to access subsidized rates.

   • Ensure your mortgage is “NMRC-refinanced” — that helps banks offer tighter margins.

3. Negotiate the spread & margin

   • Lenders typically add a margin over the benchmark rate. Push to reduce that margin.

   • Use competition — get quotes from multiple banks.

4. Choose optimal tenure/amortization structure

   • Sometimes a shorter tenure means a lower margin (if risk is lower).

   • Fixed vs variable: A partly fixed rate may protect you from rising rates early.

5. Leverage collateral and equity

   • A higher down payment (lower loan-to-value) reduces lender risk and may secure better terms.

   • Present clean, titled property documentation.

6. Lock in early

   • If projections are favorable, try to lock a rate when the market dips or when the CBN signals cuts.

By doing these, a well-prepared borrower in 2026 might secure rates closer to the lower end of forecasts, especially in subsidized or NMRC-enabled segments.

Common Mistakes to Avoid

1. Not asking whether the loan is NMRC-refinanced — many banks won’t volunteer this.

2. Ignoring hidden fees — valuation, legal, and insurance costs can erode savings.

3. Failing to compare across banks — accept “first offer” only if truly competitive.

4. Overextending tenure unnecessarily — longer terms might come with a higher total cost.

5. Assuming rates will always drop — don’t overcommit based on optimistic forecasts.

6. Neglecting documentation and title risk — weak titles or unclear land status increase bank risk and cost.

🏡 Next Read:

• Mortgage Loan in Nigeria (Pillar Guide)

• Mortgage Loans for Low-Income Earners

• Mortgage Loan Without Collateral in Nigeria

FAQs

Q: What is the projected mortgage interest rate in Nigeria for 2026?
A: In a baseline scenario, commercial mortgage rates in 2026 may range from 16% to 22%, depending on borrower profile, location, and bank margin. Subsidized or NMRC-backed schemes may bring some rates down to 10%–14% for qualified applicants.

Q: Which bank currently offers the lowest mortgage rate in Nigeria?
A: For purely commercial mortgages, banks with NMRC-backed offerings (e.g., Access, Stanbic) may offer more competitive margins. But the NHF / FMBN scheme remains the lowest option (~6%) for eligible contributors.

Q: How can I qualify for an NHF subsidized mortgage?
A: You typically must be in the formal sector, be a registered NHF contributor, have proper documentation, meet income and employment criteria, and the property must meet NHF eligibility criteria.

Q: Will mortgage rates drop in 2026?
A: It depends on inflation trends, CBN policy, and fiscal discipline. If inflation cools and CBN cuts MPR aggressively, yes — rates could fall into the mid-teens for good borrowers. But downside risks remain.

Q: Are fixed or variable mortgage rates better in Nigeria?
A: Mixed or partly fixed rates may offer protection against abrupt rate hikes in the early years. If forecasts trend downward steadily, variable rates may deliver lower costs in later years.

Conclusion

Mortgage interest rates in Nigeria remain high, but 2026 offers a potential window of easing if inflation moderates and policy becomes more supportive. As a homebuyer or property investor, your goal should be to aim for the lower end of forecast ranges — ideally in the teen percentage band — by leveraging NHF/NMRC schemes, negotiating margins, improving credit, and being selective about lender and location.

Remember: forecasts are guides, not guarantees. Monitor CBN announcements, inflation data, the naira exchange rate, and fiscal policy shifts. With careful planning and competitive shopping, you could land a mortgage that’s far more favorable than what many see as “normal” today.