Financing your purchase

Mortgages in Ghana

Financing your purchase

For a non-Ghanaian looking to buy property in Ghana it is advisable to secure a mortgage even before you begin your property search. This way you can avoid delays in the buying process once you have found the perfect house.

Like most countries, the best mortgages are available to people who are working and can put down some sort of deposit on the property. A good place to start your mortgage search is your bank. Getting a mortgage with them may be easier than another lender as you already have a relationship with them.

If you can’t get a mortgage with your bank then start with the main lenders in Ghana:

  • HFC Bank
  • Ghana Home Loans
  • Fidelity Bank
  • CalBank (CalMortgage)
  • Stanbic Bank

Each of these providers offer variations on the four main mortgage types in Ghana, albeit under different names.

Home Purchase Mortgage (HPM)

This type of mortgage is designed to assist companies and individuals in buying a property for their own use or for rental. The borrower is usually expected to make a minimum 15% downpayment and the bank will provide a loan equivalent to a maximum 85% of the purchase price.
The loan terms are usually 15 years and as with all home loans in Ghana, the interest rates are variable (ARM) rates.

Home Equity Mortgage (HEM)

This product is designed for people who already own property to release equity in that property in order to improve their liquidity. Only people or companies that already have properties which are fully paid for or are currently financed may apply for this mortgage.
The maximum loan allowed under this programme varies from bank to bank, but the interest rate is always variable and the duration is generally 15 years.

Home Completion Mortgage (HCM)

Borrowers needing a loan to complete the construction of their home should apply for this product. The house could have been initially funded by the owners own money, their employer, bank or another mortgage company.
Again, the maximum loan varies from bank to bank but the loan term is 15 years, the maximum loan-to-value is usually 50%, and the interest rate is variable.

Home Improvement Mortgage (HIM)

This loan is designed to help existing owners to improve their property or business premises. It is similar to the HEM above, except the loan must strictly be used on the designated property.

Mortgage requirements

Mortgage requirements in Ghana are much the same as in other countries. In order to be approved for a loan you will need to satisfy the following criteria:

  • Be creditworthy with no history of bad debts
  • Can provide adequate security for the loan
  • Have enough funds for the downpayment
  • Are financially able to repay the mortgage (ideally repayments should be 40% of the borrowers earnings).

Prospective applicants must be at least 18 years old and not older than 65. The length of the mortgage cannot extend past a person’s retirement age. Mortgage applicants older than 55 should ensure they can secure a 15 year life insurance policy before applying for the mortgage.

The applicant must be able to provide evidence (bank statements, pay slips and tax returns) of their gross monthly income. Self-employed applicants will have to provide evidence of their salary from a registered accountant.

The documents required for a mortgage application are as follows:

  • Proof of identification - passport, driving licence.
  • Proof of employment - a current contract from your employers, or for self-employed people, a certified statement of income.
  • Proof of income - Most recent 3 months’ paycheques or self employed foreign residents may submit tax return forms for 3 financial periods.
  • Proof of address - utility bills, rental agreement etc.
  • Credit history report

For a full list of mortgage requirements  see the Royal Estates Group website.

Further reading

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