home loan

Almost every Nigerian adult has had the conversation where someone says they are still renting because banks here do not really do mortgages, or the rates will make your head spin, and everyone nods because it is true and it is tiring.

A home loan is simply the fix people in other countries use for this exact problem. You do not have ₦45,000,000 sitting around to buy a house outright, so the lender pays the seller on your behalf, and you pay the lender back monthly, with interest added, over a long stretch of years, sometimes fifteen, sometimes twenty five.

The house you are buying becomes the collateral. If you stop paying, the lender can take the property and sell it to recover their money. That is the trade you are making for the privilege of living in a home you have not fully paid for yet.

In the United Kingdom, someone earning a steady salary in Manchester might get a mortgage covering ninety percent of a house's value, put down the remaining ten percent themselves, and spend the next twenty five years paying it off in monthly instalments that include both the loan amount and interest.

In Nigeria, home loans exist too, through the National Housing Fund, commercial banks, and mortgage banks like the Federal Mortgage Bank, though interest rates tend to be higher and terms shorter than what you find abroad, which is why many Nigerians in the diaspora choose to buy property back home in cash instead, sending money over in stages as construction or purchase progresses.

Either way, the idea is the same everywhere. You borrow big, you repay slowly, and the house watches over the whole arrangement as proof that you are good for the money.