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Why Is Mortage So Unpopular In Nigeria? - Properties - Nairaland

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Why Is Mortage So Unpopular In Nigeria? by babyx(f): 11:24am On May 25, 2016
Hello Nlanders,

I am seriously disturbed by the huge amount of rent am currently paying.
Why cant i turn that rent to a mortage? like live in the property, pay yearly and own it after 10years or more.
This need of mine is popular amongst average young working class people. What should we do? what can be done?
Am so worried sad
Re: Why Is Mortage So Unpopular In Nigeria? by kyandy1: 12:36pm On May 25, 2016
Yes that's a question that has been on my mind for a long time, firstly the banks don't give out mortgage plans for more than 8 years, the last time I checked most were requesting for a maximum of 5years.
The areas where these can be made popular (as in over 5 years)is when there is a developer backing up the property that has partnered with the banks to build the property. I still stand corrected but I believe the banks aren't really there for our interest rather theirs.

A second factor would be the interest rate comparison with income or salary scale of an individual. We are in a country were banks charge an interest rate of over 20% annually, it will take as little as 5 years to give the banks over 100% profit of the initial housing cost, so, I don't believe they believe a mortgage plan of 10, 15 or 20 years will benefit them if they extend the years as we have a very very very very... low salary scheme in Nigeria. It only puts more pressure on people of low income. I could tell you more reasons but it solves nothing so let me just say we need great minds.

But I do know that the Federal Mortgage Bank of Nigeria (FMBN) issues out loans of over 20 years sometimes 30 depending on your current and retirement age at an interest rate of 6%. Yep! very true 6%. As of last year, It was 6% only but there is a catch to it because it was created to enable civil servants own properties. There are detailed procedures for individuals working for private establishments but its best to visit them to understand their terms but take note that it could take a while for your approvals.

But hopefully other solutions could arise as we keep thinking of ways to solve this problems

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Re: Why Is Mortage So Unpopular In Nigeria? by babyx(f): 10:02am On May 31, 2016
Thank you @kyandy1.
Will explore FMBN options as am not a civil servant i best brace myself. smiley
Re: Why Is Mortage So Unpopular In Nigeria? by shaibu123: 11:01am On May 31, 2016
Simple because of too much uncertainties in NIgeria labour market.Banks will not be able to get their money back from the mortgage sold to an individual in Nigeria. Some people owns landlords like a year or two years rent but you can't do that to the bank.

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