What is the minimum deposit for getting a house on mortgage in 2024? A mortgage expert explains

Jan 19, 2024


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What is the minimum deposit for getting a house on mortgage in 2024? A mortgage expert explains

Are you looking to buy your first home? If you intend on doing so, you may have considered getting it on a mortgage. Getting a house on a mortgage requires you to contribute a deposit towards the value of the property. We have a mortgage calculator on each of the hundreds of property pages on Zerodip. You can calculate your deposit there. But saving for a deposit can look like you are assuming the entire risk, but if you consider your monthly payments, you realise that a higher deposit can be a piggy bank.


If you intend to buy a house on a mortgage, you may quickly realise that paying a deposit can turn out to be the most immediate cost. Banks are usually wary of giving you a loan-to-value above 80%; however, if the value of the house is below 5 million Naira, you may get a 90%. No bank will give you a 95% LTV, but only one can give you a 100% LTV.

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The CBN policy with primary mortgage institutions advises that the maximum LTV a mortgage applicant can get is 80%, but there are cases where you can get up to 90%. Saving for a larger deposit can mean lower interest rates in the long run. This will be different if you pay a smaller deposit.

These are the LTVs you can qualify for if you intend to buy a house on a mortgage in 2024:

  • 70%: if the value of the property is between ₦10,000,000 and ₦15,000,000.
  • 80%: if the value of the property is between ₦5,000,000 and ₦10,000,000.
  • 90%: if the value of the home is between 0 and 5 million Naira.


According to a mortgage professional with a national primary mortgage institution with whom we spoke, "the minimum deposit you can pay depends on the value of the property you are going for."

"If you are buying a house in Ajoda Estate in Ibadan, for example, and the value is 4 million or under, you have to provide 20%; that is ₦800,000. But, within that same estate, you can pay up to 25% and more, especially when the property is in the tens of millions."


Is it good to have a bigger deposit?

Yes, it is good if you have a bigger deposit, as you end up saving on the monthly repayments.

If the value of the home you purchased is ₦16,000,000 and you paid a 25% deposit, it means the balance of 12 million will be spread across the mortgage term. If, for example, you have a term of 10 years, it means that monthly, you have to pay ₦100,000. That equates to an annual repayment of ₦1,200,000. If you paid a 10% deposit, your monthly fee is ₦144,000, which is ₦1,440,000 annually.


What interest rate am I charged on my mortgage?

Your mortgage can be one of two options: an NHF mortgage or a non-NHF mortgage. NHF means National Housing Fund. The Federal Mortgage Bank of Nigeria is responsible for managing this.

Your monthly interest rate depends on which of the options you are following. Both use a variable mortgage rate, which means that your rates are subject to fluctuations; however, with the NHF, you are able to access lower rates.

According to our source, though the NHF option represents better value, "there is a tendency for you to remain in the pipeline for years. It can be as long as two years. The rate is as low as 6%; some people have to wait in the pipeline for as long as two years."

There are also rules attached to the NHF route. They include:

  • You must have been a member of the NHF for a period of six to 12 months.
  • You must have contributed to the NHF for up to six consecutive months.


The non-NHF route depends on your primary mortgage institution. They are free to set their interest rates, and they are subject to fluctuations. According to our source, "some banks do 16%."


How much deposit do I need to get good interest rates in 2024?

Primary mortgage institutions tend to have strict requirements when it comes to the amount of deposit you are required to put down on your property.

In 2024, these deposits will usually

  • 10% deposit, which means 90 percent LTV from the PMI
  • 20% deposit, which means 80% LTV
  • 30% deposit, which equals 70% LTV


Some PMIs may look favourable to your application if there is little risk to them. This means that if your deposit is higher, you may access interest rates lower than the 16% that non-NHF PMIs charge.


Can I buy a house on a mortgage with a 5% deposit?


"It is very rare. There is no evidence of a PMI that can give you that deal."


Can I get a house with a 100% mortgage?

100% is possible under certain conditions. They are rare, according to our source.

If you are going for a commercial mortgage, then it is possible to get the PMI to agree to give you 100% LTV.

The Federal Mortgage Bank of Nigeria must also have fully financed the property.

It is rare to find this.


If I am going for shared ownership with a friend, can I pay a 5% deposit?

You cannot get a house with a 5% deposit. If you are not a couple—that is, a legally married couple—you cannot individually pay a 5% deposit.

If the other party is your friend, you may decide to handle the mortgage application while the friend contributes by paying off the mortgage.

Another reason for this is that only one name can appear in a CofO.

If you are a married couple, then it is different. You can have a joint bank account and apply together.



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What is the minimum deposit for getting a house on mortgage in 2024? A mortgage expert explains

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