Mortgage loan requirements are often confusing for consumers in Nigeria due to the technical nature of the real estate market.
This article breaks down the requirements, documents, and everything else a consumer might need to easily make a successful mortgage loan application.
You will find:
- The eligibility criteria for a mortgage loan
- Documents required to obtain a mortgage loan
- Other relevant information to applying for a mortgage loan
What is a mortgage loan?
A mortgage loan is a kind of long-term loan that is taken to buy or improve any form of real estate. This includes a house, land, estate, office buildings, shopping malls, hotels, etc.
Mortgage loans are usually secured with the property of the real estate that is being financed. This means that if a borrower fails to repay the loan, the property that is being financed by the lender will be seized by the lender.
Eligibility criteria for a mortgage loan in Nigeria
Different lenders in Nigeria may have different eligibility criteria for mortgage loans in Nigeria for different kinds of borrowers since the range of things that can be financed in real estate widely varies. For instance, the eligibility criteria for a single-home mortgage loan are different from the criteria for a huge shopping mall mortgage loan.
Housing initiatives like the National Housing Fund (NHF), and the Federal Mortgage Bank of Nigeria (FMBN) can also make the eligibility criteria for mortgage loans different for Nigerians.
There are, however, general requirements that must be met no matter the scale of the loan. These include:
- Age requirement
- Income requirement
- Credit history
- Down payment
- Insurance
- Legal documents
Age requirement
To be eligible for loans in Nigeria, borrowers must be above the minimum age of 18 years. Mortgage loan lenders, however, often increase this minimum age to 21.
This is because mortgage loans often involve huge amounts of money, and lenders in Nigeria always prefer borrowers above the minimum age as it indicates financial experience.
To this end, to be eligible for a mortgage loan in Nigeria, borrowers must be between the age of 21 and 60. Age requirements can be flexible depending on the financial portfolio of the borrower.
Income requirement
The income requirement is one of the most vital and least flexible eligibility requirements for mortgage loans.
Without a steady source of income, no lender will offer a borrower a mortgage loan. This is because mortgage loans often require huge amounts, and a steady source of income is a strong indicator that a borrower will be able to repay the loan therefore indicating eligibility.
A borrower’s income must be able to comfortably handle the monthly repayments of the required mortgage loan or else they will not be eligible for the mortgage loan. To this end, they must be able to show sufficient evidence including but not limited to bank account statements or pay slips.
It might be important to note that mortgage loan lenders in Nigeria might require borrowers to have a steady income for at least two years before they can be eligible to take a mortgage loan.
Credit history
A borrower must have a credit history that clearly shows that they will be able to repay the mortgage loan that they require from the lender or else they will not be eligible for the loan.
Lenders use credit histories, and most particularly credit scores to determine if the potential borrower is creditworthy enough to receive a mortgage loan. You must have at least a credit score of 650 (out of a possible 850) to qualify for a mortgage loan in Nigeria.
Some lenders might be willing to work with borrowers who have lower credit scores but at the cost of higher interest rates and larger down payments.
Down payment
Real estate development requires a lot of financial commitment. Lenders require borrowers to show that they are up to this financial commitment and the only obstacle is the time it would take to accumulate the needed finances.
This is why lenders in Nigeria as for a down payment towards the purchase or improvement of the property. This payment is usually anywhere between 10% and 30% of the total money required, with most lenders in Nigeria demanding at least 20%.
Borrowers who cannot make this down payment are deemed ineligible while borrowers who can make higher downpayments can get access to higher amounts of mortgage loans and lower monthly payments.
Borrowers might be able to negotiate for a lower percentage for down payments with some lenders. These lenders will require the borrowers to pay private mortgage insurance, however.
Insurance
Lenders require that the real estate intended to be financed is insured by the borrower. This insurance protects the property, the borrower, and the lender from losses due to damage, theft, natural disasters, and other unforeseen circumstances allowed by the insurance company.
Without this insurance, a borrower might not be eligible to receive a mortgage loan from most lenders.
Property valuation
Lenders need to have the full property valuation of the real estate that needs to be financed with a mortgage loan. A borrower that cannot provide this is not eligible for a mortgage loan.
This valuation, usually conducted by a professional appraiser, will be used to determine the loan amount that the lender is willing to offer.
Legal documents
To be eligible for a mortgage loan in Nigeria, a borrower must provide legal documents for the property of the real estate to be financed to prove ownership. These documents include the survey plan, title deed or certificate of occupancy or deed of assignment, building plan, etc.
The legal documents ensure that there are no legal disputes on the property and that the lenders are providing funds to the rightful owner of the estate.
Documents required for a mortgage loan in Nigeria
Apart from meeting the eligibility criteria for mortgage loans, borrowers also have to gather important documents to boost their chances of approval.
These documents will be used by lenders to verify that the borrowers meet the eligibility requirements. They include:
- Documents for personal identification
- Documents for proof of income
- Employment verification
- Credit report
- Property documents
- Document for insurance
Documents for personal identification
This includes:
- Valid government-issued identification card (driver’s license, national ID card, voters card, or international passport)
Documents for proof of income
These include:
- Recent pay stubs
- Tax returns
- Bank statements
Employment verification
This includes:
- Employment letter from the employer showing the borrower’s job title, length of employment, and salary
Lenders will contact your employer to verify this information so it is always best to be as honest as possible.
Credit report
This document shows a borrower’s credit history, alongside payment history, outstanding debts, and credit utilization.
Lenders can check to obtain a borrower’s credit report from a credit bureau in Nigeria directly but in some cases might require borrowers to generate it themselves.
Borrowers can get their credit reports from one of the credit bureaus operating in Nigeria.

Property documents
These include:
- A copy of the purchase agreement (this is the document that shows the details of the property being purchased)
- A copy of the property deed (this is the document that shows the transfer of ownership from the seller to the buyer)
- Property appraisal report (this is the document that shows the property’s market value)
- A land survey for the property (this is the document that shows the property’s boundaries and any encroachments that may affect the use or value of the property)
- Title search report (this is the document that shows the ownership history of the property in question and any legal issues or disputes that may affect the title of the property)
Document for insurance
These include:
- Homeowners insurance (this is the insurance document that protects the borrower’s property from damage due to events such as fire, theft, or natural disasters)
- Mortgage insurance (this is the insurance document that will be required if a borrower cannot make the 20% downpayment often required by lenders, it protects the lender if the borrower defaults on a loan)
Other common requirements for mortgage loans in Nigeria
It is very important to understand that some lenders may request additional documentation which may have not been listed above depending on the specific need of the lender and the financial situation of the borrower.
Some of these requirements may include:
- Life insurance
- Building plans and permits (these documents are only needed if the property being purchased is a newly constructed or renovated property)
- Profit and loss statements (for self-employed borrowers)
Conclusion
The eligibility requirements for a personal loan and the documentation required are only confusing when borrowers do not have enough knowledge. It is always advisable to read and understand articles like these to make sure that all the necessary documentation is gathered, and all the eligibility requirements have been met.
Credit Nigeria is filled with an article such as these that tell you all you need to know and helps you with financing a better future for yourself.
Frequently Asked Questions
Do I need income to qualify for a mortgage loan in Nigeria?
Yes. An income stream is part of the important factors that mortgage banks consider before giving out mortgage loans. This is because a steady income stream sends a strong signal to lenders that you are capable of easily paying back your loan. Apart from the requirements of lenders, it is never advisable to apply for a mortgage loan without a steady source of income.
Can I apply for a mortgage loan as a self-employed individual?
Yes. You can apply for a mortgage loan as a self-employed individual as long as you can show that you have a steady source of income from your employment or business.
Are there penalties for defaulting on mortgage loan payments?
Yes. There are penalties for defaulting on your mortgage loan payments. This penalty can be as mild as extra fees or as severe as possession of collateral (if present) or blacklisting from credit bureaus which prevents you from accessing other loans in the future.
Can I obtain a mortgage loan in Nigeria without collateral?
It is very unlikely to obtain a federal mortgage loan without collateral in Nigeria as lenders often use demand collateral to secure the loan. This collateral can be anything from the home being purchased to anything of equivalent worth as determined by the risk the lender is taking with the loan.
What is the range for interest rates on mortgage loans in Nigeria?
The interest rates on mortgage loans range from 15% to 20% per annum. It might be lower or higher depending on the kind of lender and the financial situation of the borrower.