Very few homes in Ghana are bought with a mortgage. Most people build in stages, out of savings, over years. The reason is simple: mortgages here have been expensive, short, and often in dollars, and few people’s income or paperwork meets what a lender asks.
They do exist, and for someone with a steady, documented income, they can work. This guide is how.
Who lends
A handful of banks and specialist mortgage companies offer home loans, regulated by the Bank of Ghana. The products are usually:
- A mortgage to buy a finished home, from a developer or a private seller.
- A home-completion or construction loan, for a house you are building on land you already own.
- An equity release loan against a home you already own.
- Mortgages for Ghanaians abroad, assessed on foreign income.
Check any lender is licensed before you apply.
— Checking a financial firm is licensed
Cedi or dollar
This is the decision that matters most.
- Dollar mortgages have carried lower interest rates. But if you earn in cedis, every fall in the cedi raises your repayment in cedis, and people have lost homes that way.
- Cedi mortgages carry higher rates, which move with the Bank of Ghana’s policy rate. Your repayment can rise, but it is in the currency you earn.
Borrow in the currency you earn. If you earn in dollars, abroad or from a dollar salary, a dollar mortgage is reasonable. If you earn in cedis, a dollar mortgage is a bet on the exchange rate.
Ask any lender for the rate, whether it is fixed or variable, how a variable rate is set, and the total you will repay over the life of the loan, in writing.
What a lender will ask for
- Proof of steady income: payslips and bank statements, or audited accounts if you are self-employed. Income paid in cash and not banked is hard to prove.
- A deposit, often a substantial share of the price.
- A clean credit history. Lenders check the credit bureaus.
- Your Ghana Card and, for many, a TIN.
- A property with a registered title. A lender will not lend on land with a customary or disputed title, because it cannot take security over it. This is the reason many homes in Accra cannot be mortgaged at all.
- Insurance: the lender will require the home to be insured, and often life cover that pays off the loan if you die.
— Your credit report — Getting a TIN
The costs beyond the interest
Ask for all of these before you apply:
- Arrangement or processing fees.
- Valuation of the property.
- Legal fees for the mortgage and the title.
- Registration at the Lands Commission.
- Insurance, every year.
- Penalties for paying off early.
If you fall behind
The Home Mortgage Finance Act, 2008 (Act 770) made it easier for lenders to enforce a mortgage, so the home can be sold if you default. If you are going to miss a payment, talk to the lender before you do: restructuring a loan is far cheaper than losing the house.
If you cannot resolve a dispute with a bank, complain to the bank, then to the Bank of Ghana.