mortgage
A mortgage is a long term loan used to buy property, where the property itself is the security the lender can take if you stop paying.
In plain English
A mortgage is how most people in the world buy a home, and how very few Nigerians do, because our rates and our system make it far harder than it should be.
The idea is straightforward. A lender gives you most of the purchase price. You repay over many years, with interest. The property is the collateral, so if you stop paying, they take the house and sell it.
What makes it different from other borrowing is the time and the size. Over twenty years, at Nigerian rates, you can easily repay two or three times what you borrowed. That is not a scandal, it is arithmetic, and it is why the rate matters far more than the monthly figure that the salesman keeps repeating.
There is also the National Housing Fund, which offers lower rates to contributors, and which many eligible Nigerians never claim because nobody explained it to them.
Before you sign anything, calculate the total you will repay across the whole term. Then ask whether you would still buy this house at that price. Many people would not, and almost nobody does the sum before signing.
You borrow ₦30 million over twenty years at 20 percent. The monthly payment sounds survivable. Across twenty years you may repay well over ₦100 million. The house cost ₦30 million. You paid for it three times, and the difference is called interest.
Questions people ask
What is the National Housing Fund?
A scheme where contributors can access mortgage loans at rates far below commercial ones. Many eligible Nigerians never apply, usually because nobody told them it existed.
How much deposit do I need?
Usually a substantial percentage of the purchase price, and often more in Nigeria than elsewhere. The larger the deposit, the less you borrow and the less interest you pay.
Is renting throwing money away?
Not automatically. Rent buys you flexibility and no maintenance bills. Whether buying beats renting depends entirely on the rate, the price and how long you will stay.
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