Mortgages have grown in popularity in Ghana in recent years as more Ghanaians seek to own their own homes. Rising housing demand has increased the prices of houses in Ghana, making it more difficult for people to purchase homes outright. As a result, many Ghanaians have turned to mortgages for assistance in financing their homes.
This article will look at mortgages in Ghana, the current state of the housing market, and how people can get mortgages to buy homes.
House prices in Ghana have been steadily rising over the last decade. The average price of a three-bedroom house in Accra, Ghana’s capital city, is around GHS 400,000, according to data from the Ghana Real Estate Developers Association (GREDA) (approximately USD 68,000).
Although this price appears low in comparison to other countries, it is still out of reach for many Ghanaians who earn an average of GHS 2,500 (approximately USD 425) per month.
Many Ghanaians have turned to mortgages to help them finance their homes in response to the rising cost of housing. Mortgages are available in Ghana from both domestic and international banks, with interest rates ranging from 16% to 30%.
Interest rates are high in comparison to other countries, making it difficult for some people to obtain mortgages. However, some government programmes provide low-income earners with subsidised mortgages.
Borrowers in Ghana must meet certain eligibility requirements to obtain a mortgage. These include a consistent income and a minimum down payment of 20% of the home’s purchase price. Borrowers must also show proof of employment, such as pay stubs or tax returns, as well as a valid ID card.
We can use data from the Bank of Ghana to gain a better understanding of the current state of mortgages in Ghana. From 2016 to 2020, the table below shows the number of mortgage accounts and the value of mortgage loans in Ghana.
| Year | Number of Mortgage Accounts | Value of Mortgage Loans (GHS) |
|---|---|---|
|
2016 |
11,947 |
573,634,000 |
|
2017 |
11,574 |
607,546,000 |
|
2018 |
11,034 |
671,947,000 |
|
2019 |
10,753 |
744,304,000 |
|
2020 |
10,684 |
810,476,000 |
According to the table, the number of mortgage accounts has remained relatively stable over the last few years. The value of mortgage loans, on the other hand, has risen significantly, indicating that people are taking out larger mortgages to finance their homes.
In conclusion, with the high price of houses for sale in Ghana, mortgages have become an increasingly popular way for Ghanaians to purchase homes. Even though interest rates are high, government programmes and eligibility requirements allow many people to obtain mortgages. The table above shows that the value of mortgage loans has steadily increased in recent years, indicating that more Ghanaians are using mortgages to finance their homes.
