If you are looking for Mortgage Houses In Lagos, you have to make sure about the offers. In the Nigerian real estate context; “Payment Plans” and “Mortgage” are often used interchangeably. Payment plans are usually marketing techniques employed by the real estate developers to make their products accessible to people from a wide economic range. On the other hand, Mortgages should come from other financial institutions whose job will be forking out the cash to facilitate the purchase.
You cannot afford to ignore Lagos; this is the real estate capital of Africa; a market that is attracting international attention.
This article explores what mortgages are, how they function in Lagos, the institutions offering them, and the systemic issues that make them difficult to access. We’ll also compare mortgages to payment plans, walk through the step-by-step process of securing one, and examine what needs to change for mortgages to truly unlock housing opportunities in Lagos.
How Does A Mortgage Work?
A mortgage is a long-term loan used to purchase real estate, where the property itself serves as collateral. The borrower agrees to repay the loan over a fixed period—typically 10 to 30 years—through monthly installments that include both the principal (the original loan amount) and interest. If the borrower defaults, the lender has the legal right to repossess the property.
Mortgages are standard in many parts of the world, especially in developed economies where credit systems are robust and property markets are well-regulated. In Nigeria, however, mortgages are still a niche offering, largely limited to formal sector workers and high-income earners. The reasons are complex: from high interest rates and poor credit infrastructure to land title issues and low trust in financial institutions.
Mortgage Availability in Lagos
Despite these challenges, mortgages are available in Lagos through several channels:
Primary Mortgage Banks (PMBs)
These are specialized institutions licensed to offer mortgage loans. Examples include:
- Abbey Mortgage Bank
- TrustBond Mortgage Bank
- Infinity Trust Mortgage Bank
PMBs often partner with developers to offer mortgage-ready homes and may also work with government schemes like the National Housing Fund (NHF).
Commercial Banks
Some commercial banks offer mortgage products, especially to salaried workers. These include:
- Access Bank
- GTBank
- Stanbic IBTC
- First Bank
Their offerings vary in terms of interest rates, tenure, and eligibility criteria. Most require a formal employment history, proof of income, and a clean credit profile.
Government Schemes
The Lagos State Rent-to-Own Scheme and the Federal Mortgage Bank of Nigeria (FMBN) provide subsidized mortgage options for low- and middle-income earners. These programs aim to reduce the housing deficit by offering flexible payment structures and lower interest rates.
Emerging Platforms
In 2025, new digital platforms and fintech startups are entering the mortgage space, offering:
- Shariah-compliant mortgages for faith-based buyers
- Digital pre-qualification tools
- Flexible down payment options
- Diaspora-targeted mortgage plans
These innovations are slowly expanding access, especially for younger and tech-savvy buyers.
Mortgage vs. Payment Plan: What’s the Difference?
Many Lagosians opt for payment plans offered directly by developers. These are installment-based arrangements that allow buyers to pay over a short period—usually 6 to 24 months. While convenient, they lack the structure and protections of formal mortgages.
Here’s a comparison:
| Feature | Mortgage | Payment Plan |
|---|---|---|
| Structure | Formal loan with collateral | Installments agreed with seller |
| Regulation | Governed by financial institutions | Often informal or semi-formal |
| Tenure | Long-term (10–30 years) | Short-term (6–24 months) |
| Interest | Charged monthly | May be interest-free or fixed markup |
| Ownership Transfer | After full repayment | Often after final payment |
| Credit Check | Required | Not always required |
| Risk | Lower (regulated) | Higher (less legal protection) |
While payment plans are easier to access, they often come with hidden risks—such as unclear title documents, lack of legal recourse, and sudden changes in terms. Mortgages, though harder to obtain, offer more security and long-term affordability.
Step-by-Step: How to Get a Mortgage in Lagos
If you’re ready to explore mortgage options, here’s a practical guide:
Assess Your Financial Readiness
- Review your income, expenses, and savings.
- Ensure you have a stable job or business with documented earnings.
- Prepare for a down payment (typically 20–30% of the property value).
Check Your Credit Profile
- Nigerian lenders assess your creditworthiness through bank statements, employment history, and debt obligations.
- A clean financial record improves your chances of approval.
Choose a Mortgage Provider
- Compare offerings from PMBs, commercial banks, and government schemes.
- Consider interest rates, tenure, fees, and eligibility requirements.
Get Pre-Qualified
- Submit basic documents: ID, proof of income, employment letter, bank statements.
- The lender estimates how much you can borrow and what your monthly payments might be.
Find a Property
- Choose a property that fits your budget and meets lender criteria.
- Ensure the property has a valid title (C of O or Governor’s Consent).
- Some lenders offer listings of pre-approved properties.
Submit a Formal Mortgage Application
- Provide full documentation:
- Completed application form
- Valid ID and passport photos
- Proof of income (pay slips, tax returns)
- Bank statements (6–12 months)
- Property documents (title, valuation report)
- Down payment proof
Property Valuation and Legal Checks
- The lender conducts a valuation to confirm the property’s worth.
- Legal due diligence ensures the title is clean and transferable.
Loan Approval and Offer Letter
- If approved, you receive a mortgage offer detailing:
- Loan amount
- Interest rate
- Repayment period
- Monthly installment
- Terms and conditions
Sign Mortgage Agreement
- Review the terms with a lawyer.
- Sign the agreement and provide any final documents.
- Pay the down payment and applicable fees (legal, processing, insurance).
Disbursement and Property Transfer
- The lender pays the seller directly.
- You receive possession of the property.
- Title documents are transferred and registered in your name.
Begin Monthly Repayments
- Repayments typically begin the month after disbursement.
- Set up automatic debit to avoid late fees.
- Maintain communication with your lender for any changes or refinancing options.
Challenges in the Lagos Mortgage Market
Despite growing demand, mortgages in Lagos face several systemic and practical challenges:
Low Penetration
Mortgage financing accounts for less than 1% of Nigeria’s GDP, compared to 60–100% in developed countries. Most Nigerians still rely on personal savings or informal payment plans.
High Interest Rates
Interest rates on mortgages can exceed 20%, making monthly payments unaffordable for many. Even subsidized schemes struggle to offer truly competitive rates.
Land Bureaucracy
Most big banks are not going to fund a purchase if the land titles are not clear, and securing Certificates of Occupancy (C of O) is not easy in Nigeria. This discourages lenders and buyers alike; but mostly lenders because the investment looks too risky.
Limited Trust in Institutions
Many Lagosians prefer direct payment plans due to distrust in banks and mortgage firms. Stories of fraud, hidden fees, and poor customer service abound. Besides, the Nigerian banking system has always been shaky; banks go out of business from time to time.
Self Employed Are Unwelcome
A large portion of Lagos residents earn income outside formal employment. So far, only people who earn huge salaries in government, or top private companies find themselves welcome by mortgage banks; with the rest of us shut outside the system. This is one of the biggest issues with Mortgages in Lagos and Nigeria as a whole.
Cultural Preferences
After so many bad experiences with banks and other financial institutions, it has become a culture to just pay cash. In fact your parents will tell you to save the money until it is enough to buy the house outright as they do not want to hear stories that touch the heart.
The Way Forward
To unlock the full potential of mortgages in Lagos, several reforms are needed:
- Digitize land records to streamline title verification and reduce fraud.
- Expand government-backed schemes with flexible terms and broader eligibility.
- Introduce credit scoring for informal earners, using mobile money and bank transaction histories.
- Promote financial literacy around mortgage benefits, risks, and processes.
- Encourage public-private partnerships to build affordable, mortgage-ready housing.
- Strengthen regulatory oversight to protect borrowers and improve lender accountability.
Conclusion
Mortgages in Lagos represent both a promise and a paradox. On one hand, they offer a structured path to homeownership, allowing residents to build equity and stability; but on the other hand only doing so by jumping some impossible hoops.
The solution: talk to a real estate consultant to help you understand the intricacies of mortgages in the Nigerian setting, and also to help you chart a clear path towards owning your home. Start where you are; call Bestate Real Estate on 08090651344 to find out how to reach your real estate goals through Mortgages in Lagos state, or anywhere else in Nigeria.