first mortgage
First mortgage is the main loan on a property, the one with first claim on the house if things go wrong, ahead of any other loan on the same property.
In plain English
Two friends buy houses the same month. One takes a single loan from her bank to cover the property and calls it a day. The other takes a loan for the house, then a second smaller loan later to renovate the kitchen. Both of them have a first mortgage, but only one of them will ever need to know what that phrase actually means, because the moment a second loan enters the consider, the order of who gets paid first suddenly matters a great deal.
A first mortgage simply means the main loan secured against a property, the one registered first and therefore first in line to be repaid if the property is ever sold to settle debts. If a second loan is added later, perhaps a home equity loan or a top up facility, that one becomes the second mortgage. It sits behind the first, and only gets paid from what is left after the first mortgage is cleared.
Say a man in Lekki buys a duplex with a mortgage from his bank for ₦60,000,000. Two years later, he takes a smaller facility of ₦10,000,000 from another lender, using the same property as security, to expand his business. If he ever defaults and the property is sold, the first bank collects its ₦60,000,000 first. Whatever is left afterwards goes to the second lender. That order is not negotiable, it is simply how the law of priority works.
A Nigerian in Manchester sending money home to help a sibling pay down a mortgage should ask whether it is the first mortgage or a second one being cleared, because paying off a second mortgage does nothing to remove the bigger, senior debt still sitting on the property.
Lenders love being first because it is the safest seat at the table. That is often why the first mortgage carries a lower interest rate than any loan that comes after it, since the risk to the lender is smaller.
A woman in Abuja has a first mortgage of ₦45,000,000 on her home and later adds a second loan of ₦8,000,000 for renovations. If the house is sold for ₦50,000,000 after she defaults, the first mortgage lender is paid the full ₦45,000,000 first, leaving only ₦5,000,000 for the second lender.
Questions people ask
Can a property have more than one mortgage at the same time?
Yes, once the first mortgage is in place, a homeowner can take a second or even third loan against the same property, though each new lender sits further back in the queue for repayment.
Does the first mortgage always have to be the biggest loan?
Not necessarily. It is called first because of when it was registered and its priority claim, and not since of its size, though in practice it is usually the larger, original loan used to buy the property.
What happens to the first mortgage if the property is sold?
The first mortgage must be settled before the seller keeps any proceeds or before other lenders with later claims are paid, since it sits at the front of the line by law.
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