The National Homeownership Fund (NHF) of Ghana has announced the revival of its National Mortgage Scheme, offering an annual interest rate of 8.4%. This move aims to make homeownership more accessible to lower-income Ghanaians who were previously priced out of the market by commercial lenders with interest rates as high as 20-30%.
Under the revived scheme, a worker earning a net monthly income of GH₵2,500 can qualify for a mortgage of up to GH₵143,000. According to NHF Chief Executive Officer Prosper Hoetu, such a borrower would repay approximately GH₵1,231.95 every month over a maximum period of 20 years.
The scheme is designed to scale with income, allowing applicants to access larger mortgages based on their earnings. For instance, accessing a GH₵500,000 loan would require a net monthly salary of about GH₵8,700. The exact amount any applicant can access will still depend on their income and an assessment carried out by the participating bank.
The National Mortgage Scheme also allows joint applications, enabling spouses or other eligible co-applicants to combine their incomes to qualify for a larger loan than either could secure individually. This feature is expected to benefit many Ghanaians who may not have been able to access mortgages on their own.
Ghana's mortgage market has historically been dominated by commercial lenders with high interest rates and strict income thresholds, pricing out many salaried workers, particularly those in the informal or lower-income brackets. The 8.4% interest rate offered by the NHF represents a significant departure from the norm, potentially bringing home financing within reach of workers who earn modest but steady monthly incomes.
However, qualifying for a headline mortgage figure does not guarantee approval or full coverage of a property's cost. Final approval will depend on factors such as the applicant's age, existing loans, employment record, credit history, and the value of the property being purchased. Additional costs, including a deposit, insurance, property valuation, legal documentation, and processing charges, could also increase the total amount a buyer needs to raise.
The National Homeownership Fund is a government-backed initiative aimed at expanding access to affordable mortgage financing for Ghanaians who have been shut out of the formal housing finance system. The scheme will be administered through participating financial institutions, including GCB Bank, Republic Bank, and Stanbic Bank. Prospective applicants have been advised to contact one of these participating banks directly to begin the application process.
Key points
- A worker earning GH₵2,500 per month can qualify for a GH₵143,000 mortgage.
- The National Mortgage Scheme offers an 8.4% interest rate, significantly lower than commercial lenders.
- The scheme allows joint applications, enabling co-applicants to combine their incomes to qualify for larger loans.
