Real Estate Developer Decries High Mortgage Interest Rates

A front line developer in the building industry, Mr Banjo Olajide, has lamented the high interest rates in obtaining mortgages.
Olajide, who is a property development consultant, based in Port Harcourt, the Rivers State capital, noted that high interest rate was a major reason many Nigerians could not afford mortgage.
He pointed out that the impact of high interest on mortgage and Nigeria’s affordable housing delivery was a source of worry for investors and home ownership seekers, saying, “high mortgage interest rates is a bane for housing demand in Nigeria.
Olajide stated that at the present in Nigeria, mortgage loans are obtained at a range of between 15 and 25 per cent per annum, explaining that this is not included in other charges, as the commercial banks charge between 22 and 23 per cent due to high risk and payment to government agencies.
Furthermore, he said high interest rate was also the reason mortgage banks in Nigeria are not doing well, stressing that given the high interest rates, giving a loan tenure of 15 years was difficult.
He regretted that while commercial banks were declaring profits in billions and having a return on investment of over 20 percent  on the average, the mortgage banks were making just three percent and reasoned that the business community does not place a premium on mortgage.
Olajide enjoined the government to look into the high interest rate and adequately address it, “so that everybody would have access to mortgage loans”
He observed that in developed economies mortgage loans are taken by firms and individuals to purchase estates or houses without the urgency of paying back immediately.

Tonye Nria-Dappa