The Mortgage Challenge: Financing a Home Purchase in the Lagos Market

In 2025, the Nigerian mortgage landscape is dominated by high interest rates. With the Central Bank of Nigeria’s (CBN) Monetary Policy Rate (MPR) hovering around 27%, commercial bank mortgage rates often land between 18% and 30%. For a 20-year loan, these interest payments can triple the original cost of the home

National Housing Fund (NHF): Managed by the Federal Mortgage Bank of Nigeria (FMBN), this remains the most "affordable" option with a 6% interest rate. However, the loan limit (typically up to ₦15 million) is often insufficient for Lagos property prices, forcing buyers to seek "top-up" loans from Private Mortgage Banks (PMBs).

1. ​Lagos State Rent-to-Own Scheme: A proactive initiative by the state government allows residents to pay a 5% commitment fee and move in, paying the balance as rent over 10 years.

2. ​Commercial Mortgages: Offered by banks like Stanbic IBTC or Standard Chartered, these require a 20-30% down payment and a high minimum monthly income (often ₦350,000+).

   
   

   The cost of obtaining a Governor’s Consent or Certificate of Occupancy (C of O) can add 10-15% to the total cost.

   
   

3. ​Short Tenures: While Western mortgages last 30 years, Nigerian banks often cap tenures at 15-20 years or until the borrower reaches the age of 60.

Financing a home in Lagos requires a "hybrid" strategy combining personal savings, NHF contributions, and perhaps developer-led installment plans to bridge the gap left by expensive traditional mortgages.