Mortgage: 8 banks that will pay for your dream home

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A mortgage is the key to your dream home

Traditionally, Tanzanians have had to save their own money for years in order to build or buy their dream home. However, nowadays, more and more banks have started offering mortgages and it is slowly becoming a popular way for some Tanzanians to finance their homes.

What exactly is a mortgage?

A mortgage is a legal agreement whereby a bank lends you money to be paid back with interest within a specific period of time, in exchange for taking the title of your property until the debt has been repaid.

While still relatively new, according to Tanzania Invest, the mortgage market in Tanzania has made some progress and experienced an overall 13% increase in 2016. However, the mortgage market still only contributes to less than 1% of the GDP. This is not because people in Tanzania don’t need home loans, but that they are unaware of their options and so do not utilise the services available to them.

Luckily, we’ve got a list of 8 banks in Tanzania that offer mortgage loans.

  1. Equity Bank:

Equity bank commands about 24 percent of the mortgage market share in Tanzania. This Kenyan bank’s success stems from having already effectively developed its mortgage services in the Kenyan market.

  • Equity offers loans of up to 80% of the value of the property

  • The debt needs to be paid within 10 years.

  • The interest rate for a loan to build or buy a home is just below 15%

  • The interest rate to buy a plot of land is 16%

  1. Stanbic Bank

Stanbic Bank holds 14% of the mortgage market share, making it the second most popular mortgage loan provider in Tanzania. Like Equity Bank, Stanbic offers home loans of up to 80% of the value of the property. However, you get more time to pay the debt back as the repayment period is 15 years.

  1. Azania Bank 

Azania Bank has about 11% of the mortgage market share in Tanzania. To get a home loan with them, they require:

  • An Azania bank account with a balance of 20% of the loan amount

  • The interest rate is 19% per year, however, the rate reduces as years go by.

  • The total amount of repayment period is 15 years.

  1. CRDB 

CRDB, the biggest bank in Tanzania, offers a unique mortgage service called ‘Jijenge’, whereby you can get a loan to pay for construction materials to build a home. With the Jijenge program you get:

  • A loan of up to 90% of the building material costs

  • An interest rate of 18% (though may increase depending on account)

  • A 25 year period to repay the loan

  1. National Microfinance Bank (NMB)

NMB Bank, the second biggest bank in Tanzania, provides loans of up to 80% of the value of the house you want to buy. It also offers a relatively flexible repayment plan, as long as the debt has been cleared by 15 years from when you got the loan.

  1. National Bank of Commerce (NBC)

NBC offers mortgages for a number of circumstances, including:

  • Buying an already completed home (NBC covers up to 80% of the cost of the home)

  • Building a home (NBC covers up to 80% of the building material)

  • Renovating a home or finishing an already started home (the home should be at least 50% complete)

  • Re-mortgaging: Moving your loan from another bank to NBC

  1. Kenya Commercial Bank (KCB)

KCB offers it’s customers a loan of up to 80% of the total cost of an already completed home. In order to qualify for the loan you must provide:

  • A bank statement from the last 6-months

  • Sales agreement

  • A recent salary slip if you are employed

  • Property valuation report approved by KCB

  1. Diamond Trust Bank (DTB)

DTB entered the mortgage market in 2016, and quickly became a go-to bank for home loans. Their loans vary from 80% and below, and interest rates also depend on individual cases.

Start living your best life today

As mentioned before, the Tanzanian mortgage market is relatively new, and as a result, it definitely has it’s shortcomings like high-interest rates and long application processes. However, it will only get better as more and more people start to think of mortgages when they are considering ways to finance their homes.

Think about it, if you are a young professional and want a dream home for you and your family; why not take out a loan now and get your dream house while you are still young, rather than wait until you are older? Simply put, mortgages help us start living our best lives today, so if you are ready for your dream home don’t let money hold you back.

 

Iman Lipumba
A digital storyteller, experienced in creating content that improves website visibility on search engines, enhances the user experience, and nurtures brand loyalty. With a background in the social sciences, an expert in researching complex ideas, and communicating them in engaging language to multiple audiences.