The Housing Development Advocacy Network (HDAN), Africa’s leading housing advocacy organisation, has criticised the persistent under-performance of Nigeria’s mortgage sector, warning that millions of citizens remain unable to access affordable homeownership.
HDAN raised the concern at the Mortgage Bankers Association of Nigeria (MBAN) Mortgage Finance Roundtable held recently in Lagos.
Speaking at the event, HDAN’s Executive Director, Festus Adebayo, lamented the mortgage system’s long-standing failure to support Nigerians who need housing finance the most. According to him, the sector has remained ineffective despite years of policy interventions.
“Nigeria’s mortgage sector is not delivering for the people who genuinely need it. Too many Nigerians are shut out because the system is not structured to support affordability or accessibility,” he said.
Adebayo explained that a large percentage of Nigerians operate outside the formal banking system, while many potential homeowners do not possess the income documentation required by banks. Even those who qualify, he noted, face prohibitive interest rates ranging between 18 and 30 per cent — a level that consumes almost half of a typical family’s monthly income and makes homeownership unrealistic.
Beyond interest rates, he highlighted deeper structural challenges. Land titling, he said, remains entangled in bureaucracy that slows transactions and discourages investors. He added that foreclosure laws are unreliable and painfully slow, making long-term mortgage lending unattractive because banks struggle to recover funds if borrowers default.
Adebayo stressed that meaningful change will require more than policy declarations. He urged the government to rebuild key pillars of the housing finance ecosystem, beginning with strengthening the Nigeria Mortgage Refinance Company (NMRC) and ensuring the availability of long-term capital to support lower-interest mortgage products. He also emphasised the need to properly support government-backed initiatives such as the Family Homes Fund to expand access to affordable housing.
He noted that Nigeria’s macroeconomic instability — including high inflation and a volatile currency — continues to make mortgage pricing unpredictable, discouraging banks from offering long-term loans. According to him, the country urgently needs de-risking tools such as mortgage insurance and government guarantees to restore investor confidence.
On affordability, Adebayo said even households earning about ₦500,000 monthly struggle with mortgage repayment, pushing many Nigerians toward incremental building, cooperative housing schemes, and rent-to-own arrangements. He urged Nigeria to adopt more flexible global homeownership models, including shared-equity systems, income-linked repayment plans, and hybrid rental-ownership options, to close the affordability gap.
Looking ahead, he outlined key steps needed to reposition the sector for improved performance. These include expanding refinancing opportunities and long-term capital sources, stabilising the macroeconomic environment, digitising land administration, attracting private and institutional investment, and developing flexible mortgage products tailored to informal workers and young people.
Adebayo said these reforms are essential if the mortgage industry is to support sustainable homeownership and contribute meaningfully to reducing Nigeria’s housing deficit.
