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National Housing Fund reduces mortgage interest rate to 8.4%
•2 min read•3 sources
The National Housing Fund (NHF) has announced a significant reduction in the interest rate for its National Mortgage Scheme, lowering it from 13.5% to 8.4%. Chief Executive Officer Prosper Hoetu disclosed the change during the National Conference on Housing Finance in Accra, stating that the move is designed to make home financing more accessible to the average Ghanaian. The reduction, which became effective last month, is part of a broader effort to improve affordability, with developer financing also being reduced to 10.4%. Hoetu explained that the revised rates are the result of improved economic management and strategic collaboration with financial partners.
According to the NHF, approximately 60% of Ghanaians currently face difficulties in accessing suitable housing finance due to the rigid requirements of conventional banking. With mortgage penetration in Ghana currently at a low 0.3% of Gross Domestic Product (GDP), and 90% of housing projects relying on self-financing, the NHF aims to provide a more inclusive alternative. The scheme is specifically reviewing its structures to better serve low-income households and workers in the informal sector who have historically been excluded from the mortgage market. Since the rate cut was implemented, the NHF has reported an encouraging response, with a notable increase in applications and interest from financial institutions.
In addition to the interest rate reduction, the NHF is introducing several innovative measures to further boost homeownership. These include the development of a homebuyers database to enhance market transparency and the exploration of rent-to-own schemes. Hoetu also proposed allowing citizens to use their pension contributions as a means of securing home ownership. Having completed a diagnostic assessment for the sector, the NHF intends to use these findings for future strategic planning to ensure that the housing market becomes more sustainable and responsive to the needs of the Ghanaian workforce.