• A mortgage is basically a loan from a financial institution secured with property collateral.
  • House prices are often very expensive, hence prompting the need for people to go in for mortgage loans.
  • Mortgage products vary from Home & Land purchase to Home Improvement, Home Completion, Home Construction, Equity Release, among others
  • Notwithstanding the availability of mortgage products, less than 15% of African urban households can afford or access a mortgage loan[1]
  • Interest rates on mortgages in Ghana average 30.6%[2] APR for cedi loans with dollar-indexed loans in the region of 13%[3] per annum excluding other administrative and statutory charges.
  • Mortgage facilities are available in most traditional commercial banks, with GHL Bank and HFC Bank, amongst the leaders in the industry.
  • Typical mortgage terms are for 10-20 years with down payments of 20-25% of property value usually required.
  • A breakdown of a typical scenario for a mortgage borrower who desires to purchase a house worth GH¢ 85,000 would be as follows:
    • A minimum down payment of GH¢17,000 would be required
    • A maximum loan amount of GH¢ 68,000 would be granted
    • A monthly debt service of around GH¢ 1,823 would be charged (including interest)
    • Minimum monthly income required to qualify for the loan would be around GH¢4,600 [4] 

 

Acquiring a home is usually a costly process. No need to add to the costs by taking the wrong decisions.

Speak to an expert for professional advisory services! (visit https://traverseapps.com/Advice), click the blue icon on your rignt lower side of your brower to talk to a consultant.  

Adu Ernest Koduah, MGhIS

Real Estate Consultant

 

[1] UN – HABITAT, 2011, Quick Guide 5: Housing Finance: Ways to help the poor pay for housing, UNON, UN – HABITAT, Nairobi

[2] Bank of Ghana, 2016, Notice to Financial Institutions and the Public Notice no. bg/gov/sec/2016/11: Annual Percentage Rates (APR) and Average Interest(AI) paid on deposits as at 30th November 2016

[3] Ghana Home Loans, now GHL Bank

[4] Ghana Home Loans, now GHL Bank