Types of Mortgage Loans in Nigeria (And How to Choose the Right One)

Buying a home in Nigeria is one of the biggest financial goals for many people — yet it’s often difficult to achieve without financial help. That’s where mortgage loans come in. A mortgage allows you to buy or build your dream house and repay it gradually over several years.

However, not all mortgage loans are the same. Some are designed for civil servants, others for business owners or first-time homebuyers. Understanding the types of mortgage loans in Nigeria can help you choose the one that fits your income, lifestyle, and long-term plans.

In this guide, you’ll discover:

• The major mortgage loan types available in Nigeria

• Their requirements, interest rates, and repayment terms

• The best option based on your situation

• And how to apply for each one

Let’s begin with the basics.

What Is a Mortgage Loan?

A mortgage loan is a long-term financing arrangement that allows you to purchase or build a property while repaying the loan in installments over an agreed period — typically between 10 and 30 years.

In Nigeria, mortgage loans are usually secured by the property itself, meaning the house serves as collateral until you complete repayment. If you default, the lender can reclaim the property to recover their funds.

How Mortgage Loans Work

1. You apply to a bank or mortgage institution.

2. The lender assesses your income, creditworthiness, and property value.

3. Once approved, the lender disburses the loan, and you begin making monthly repayments (principal + interest).

4. After full repayment, you receive ownership documents for the property.

Common Features of Mortgage Loans in Nigeria

• Loan tenure: 10–30 years

• Interest rate: 6% to 25% depending on the institution

• Repayment: Monthly or quarterly

• Collateral: The property being financed

• Regulated by: Central Bank of Nigeria (CBN) and the Nigerian Mortgage Refinance Company (NMRC)

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

Major Types of Mortgage Loans in Nigeria

Nigeria has several mortgage options tailored to different income levels, employment types, and housing needs.
Below are the five main types of mortgage loans in Nigeria — including their features, requirements, and who they’re best suited for.

1. National Housing Fund (NHF) Loan

The National Housing Fund (NHF) is a government-backed scheme managed by the Federal Mortgage Bank of Nigeria (FMBN).
It’s designed to make home ownership affordable for Nigerian workers, especially those in the public and organized private sectors.

Key Features:

• Interest rate: 6% per annum (fixed)

• Tenure: Up to 30 years (depending on age and income)

• Loan amount: Up to ₦15 million

• Collateral: The property being financed

• Repayment: Monthly deductions from salary

Eligibility:

• You must contribute 2.5% of your monthly salary to the NHF for at least six months.

• Must be a Nigerian citizen and at least 18 years old.

• Must have a regular source of income.

Best For:
Civil servants, public sector employees, and low- to middle-income earners.

2. Commercial Bank Mortgage Loans

Commercial banks such as GTBank, Access Bank, Zenith Bank, and First Bank offer mortgage loans to customers who meet their income and credit requirements.
These loans are faster to access but usually come with higher interest rates.

Key Features:

• Interest rate: 10%–25% per annum

• Tenure: 5–20 years

• Loan amount: ₦5 million – ₦100 million (depending on the bank)

• Collateral: The financed property and personal guarantees

Eligibility:

• Must have a verifiable source of income (salary or business).

• Must maintain an account with the bank.

• Must provide valid property documents, valuation report, and building plan approval.

Best For:
Professionals, business owners, or high-income earners looking for flexible loan packages.

3. Primary Mortgage Institution (PMI) Loans

Primary Mortgage Institutions (PMIs) are specialized mortgage banks licensed by the Central Bank of Nigeria (CBN).
Examples include Abbey Mortgage Bank, Infinity Trust Mortgage Bank, and FirstTrust Mortgage Bank.

PMIs offer different mortgage products for buying, building, or renovating homes.

Key Features:

• Interest rate: 8%–18% per annum

• Tenure: Up to 25 years

• Loan amount: Based on the borrower’s income and property value

• Collateral: The house or property financed

Eligibility:

• Must have a regular source of income.

• Must contribute to the NHF (in some cases).

• Must meet the institution’s credit and documentation requirements.

Best For:
Salaried workers, entrepreneurs, and first-time homebuyers are seeking flexible repayment plans.

4. Cooperative Mortgage Loans

Cooperative mortgage loans are offered through registered housing cooperatives or staff cooperative societies.
Members pool funds to provide affordable housing finance for one another.

Key Features:

• Interest rate: 5%–10% per annum (depending on cooperative policy)

• Tenure: 5–15 years

• Loan amount: Based on contributions and collateral value

• Collateral: Land or property within the cooperative scheme

Eligibility:

• Must be a member of a cooperative society.

• Must meet savings or contribution requirements.

Best For:
Low- and middle-income earners who prefer a community-based housing finance system.

5. Government-Backed Housing Schemes

Apart from the NHF, several government and public-private housing schemes also provide mortgage financing to Nigerians.

Examples include:

• Family Homes Fund (FHF) — offers affordable housing to low-income families.

• Nigeria Mortgage Refinance Company (NMRC) — supports mortgage lenders with refinancing, which helps reduce interest rates for borrowers.

• Federal Integrated Staff Housing (FISH) program — for civil servants under federal housing projects.

Key Features:

• Interest rate: 6%–12% per annum

• Tenure: 10–30 years

• Loan amount: Depends on project and income

• Eligibility: Public sector workers or applicants under approved schemes

Best For:
Civil servants and first-time homebuyers are participating in government housing projects.

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

Compare Different Mortgage Loan Types in Nigeria

Before choosing a mortgage, it’s crucial to understand how each loan type differs in interest rate, repayment period, eligibility, and ideal use case.

The table below provides a side-by-side comparison of the main mortgage loan types in Nigeria:

Quick Insight

• Lowest interest rate: NHF and government-backed loans.

• Fastest approval: Commercial bank loans.

• Most flexible: PMI mortgage loans.

• Most affordable for groups: Cooperative loans.

By comparing these options, you can decide whether you want long-term affordability (NHF/government) or speed and flexibility (bank/PMI loans).

Which Mortgage Loan Is Best for You?

The best type of mortgage loan depends on your income stability, employment type, and housing goal.
Here’s a quick guide to help you decide:

• If you’re a civil servant or salary earner:
  Go for the NHF Loan — low interest, long tenure, and backed by FMBN.

• If you’re a business owner or professional:
  A Commercial Bank Mortgage gives faster access and larger loan amounts.

• If you want flexible options:
  Consider a PMI Loan, where repayment terms can be adjusted to your income.

• If you belong to a cooperative:
  Choose a Cooperative Mortgage Loan for community support and lower rates.

• If you’re applying through a housing scheme:
  Look into Government-Backed Schemes like Family Homes Fund or FISH for subsidized financing.

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

How to Apply for a Mortgage Loan in Nigeria

Applying for a mortgage in Nigeria isn’t as complicated as it seems — once you know the steps.
Here’s a simplified process most lenders follow:

1. Confirm your eligibility – Check if you qualify for NHF, PMI, or bank loans.

2. Choose your lender – Compare interest rates and repayment terms.

3. Prepare documents – ID, payslips, tax clearance, property title, and valuation report.

4. Apply – Fill out the lender’s form (online or in-branch).

5. Property appraisal – The lender verifies the property’s value and authenticity.

6. Loan approval & disbursement – Once approved, funds are released, and repayment begins.

Pro tip: Always compare at least two lenders before applying to ensure you’re getting the lowest possible interest rate.

🔗 Check out the full guide on how to apply for a mortgage loan in Nigeria →

Tips Before Applying for a Mortgage Loan in Nigeria

Before you apply, take note of these key tips to improve your chances of approval and make the process smoother:

1. Check your credit record:
   Lenders prefer applicants with a clean repayment history. Clear outstanding debts before applying.

2. Plan your down payment:
   Most lenders require you to contribute 20–30% of the property value upfront.

3. Verify the property documents:
   Ensure the land or building has a valid title (C of O or Deed of Assignment) to avoid disputes later.

4. Understand all costs:
   Factor in legal fees, insurance, and valuation charges in your budget.

5. Compare lenders:
   Don’t rush. Check interest rates, tenure, and hidden fees across multiple mortgage banks.

6. Stay within your budget:
   Choose a repayment plan that won’t strain your monthly income — ideally, mortgage payments should not exceed 30–35% of your monthly salary.

Conclusion

Owning a home in Nigeria is no longer just a dream — with the right mortgage loan, it’s achievable.
From NHF and PMI loans to cooperative and commercial bank options, each type serves a different income level and housing goal.

The key is to choose the one that matches your financial capacity, compare lenders wisely, and prepare your documents early.

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