• by George

The Path to Homeownership in Ghana

Owning a home is a significant milestone in many people’s lives, but the upfront cost can be prohibitive. This is where mortgages come in—they bridge the gap between your dream home and your current financial situation. In Ghana’s rapidly evolving real estate market, understanding how mortgages work is crucial for making informed decisions about property investment, especially when considering premium developments like Sapphire in Labone or The Madison in Accra.

Whether you’re a first-time homebuyer or a seasoned investor looking to expand your portfolio, this guide will walk you through everything you need to know about mortgages in Ghana—from basic definitions to application requirements and helpful strategies for securing favourable terms.

What Is a Mortgage?

At its core, a mortgage is a loan specifically designed for purchasing real estate. Unlike personal loans, a mortgage uses the property itself as collateral, which means the lender (usually a bank or specialised mortgage provider) can take ownership of the property if you fail to make your payments.

In Ghana, mortgages typically finance between 70-80% of a property’s value, with the buyer providing the remainder as a down payment. This arrangement allows you to become a homeowner without paying the entire purchase price upfront, spreading the cost over several years through monthly instalments.

Mortgage Terms in Ghana: What to Expect

The Ghanaian mortgage market has evolved significantly in recent years, but it still presents unique considerations compared to more established markets. Here’s what you should know:

Interest Rates

Mortgage interest rates in Ghana typically range between 25-30% per annum for cedi-denominated loans, significantly higher than rates in Europe or North America. However, some banks offer dollar-denominated mortgages with lower rates (approximately 12-15%), though these come with currency exchange risks for borrowers earning in cedis.

Down Payment Requirements

Most Ghanaian banks require:

• A minimum 20% down payment for Ghanaian citizens
• A minimum 30% down payment for non-Ghanaian residents

This means for a luxurious apartment at Sapphire or The Madison priced at $250,000, you would need to have between $50,000-$75,000 available upfront, depending on your residency status.

Loan Duration

Mortgage terms in Ghana typically range from:

• 5 years (short-term)
• 15 years (medium-term)
• Up to 20 years (long-term)

The longer the term, the lower your monthly payments will be, but you’ll pay more in interest over the life of the loan.

The Mortgage Application Process in Ghana

Required Documentation

To apply for a mortgage in Ghana, you’ll typically need:

1. Proof of Identity: National ID, passport, or driver’s license
2. Proof of Income:
   • At least 6 months of bank statements
   • Employment contract or business registration documents
   • Tax clearance certificate
3. Property Documents:
   • Sale agreement
   • Title deed or land documents
   • Property valuation report
4. Financial Information:
   • Credit history (if available)
   • Statement of assets and liabilities
   • Proof of down payment funds

Application Steps

1. Pre-qualification: Approach a bank to determine how much you might qualify for
2. Property Selection: Find a property that fits your budget and needs (such as a unit at the elegant Sapphire or The Madison developments)
3. Formal Application: Submit your mortgage application with all required documentation
4. Property Valuation: The bank arranges for an independent valuation of the property
5. Underwriting: The bank reviews your application and assesses your risk profile
6. Approval and Offer: If approved, you’ll receive a mortgage offer detailing terms
7. Acceptance: Review, negotiate if possible, and accept the terms
8. Legal Process: Legal documentation is prepared and signed
9. Disbursement: The funds are released to the property developer or seller

This process typically takes between 4-8 weeks in Ghana, though it can be longer depending on the complexity of the application and the efficiency of the chosen bank.

Navigating Common Challenges in the Ghanaian Mortgage Market

High Interest Rates

Ghana’s relatively high interest rates can make monthly payments challenging. To navigate this:

• Consider dollar-denominated mortgages if you earn in foreign currency
• Shop around for the best rates—different banks offer varying terms
• Look for properties where developers have established relationships with specific banks, like Landmark Homes’ partnerships that offer preferential rates for Sapphire and The Madison buyers

Limited Mortgage Accessibility

Not all properties in Ghana qualify for mortgages. Banks prefer:

• Properties with clear title documents
• Developments by reputable developers with track records
• Properties in prime locations with strong resale value

This is where premium developments like Sapphire and The Madison have an advantage—they tick all these boxes, making them ideal for mortgage financing.

Documentation Requirements

The extensive documentation requirements can be overwhelming. To simplify:

• Begin collecting necessary documents early in your home-buying journey
• Ensure your financial records are well-organised and up-to-date
• Consider working with developers like Landmark Homes, who can guide you through the process and connect you with preferred banking partners

Mortgage Options for Landmark Homes’ Premium Properties

Landmark Homes has established partnerships with several leading banks in Ghana to facilitate smoother mortgage processes for buyers interested in their premium developments.

The Madison

Located in the heart of Accra, The Madison offers 27 spacious and luxurious apartments with high-end finishes and exceptional amenities. With mortgage financing, you can:

• Pay a 30% initial deposit
• Finance the remaining 70% over 5-20 years
• Move into your luxury apartment while paying monthly instalments

Sapphire

Situated in the vibrant neighbourhood of Labone, Sapphire features 41 meticulously crafted apartments in a 7-storey residential development. The standard mortgage option allows you to:

• Pay a $5,000 reservation fee
• Make a first payment of 30% within 30 days
• Finance the remaining 70% through a mortgage upon completion

Both developments offer strong investment potential with rental yields of up to 12%, making them attractive not just as homes but as investment vehicles.

Tips for Improving Your Mortgage Approval Chances

1. Build a strong credit history by maintaining good standing with existing loans and credit facilities
2. Save for a larger down payment to reduce the loan-to-value ratio and potentially secure better terms
3. Reduce existing debt before applying to improve your debt-to-income ratio
4. Ensure stable employment or business income for at least 12 months before applying
5. Work with reputable developers whose properties are more likely to meet bank requirements

Conclusion

Understanding how mortgages work in Ghana is essential for navigating the property market effectively. While interest rates are higher than in many other countries, mortgages still represent a viable path to homeownership, especially for premium properties like those offered by Landmark Homes.

By familiarising yourself with the requirements, preparing adequately, and choosing the right property, you can leverage mortgage financing to invest in high-quality real estate that not only provides a luxurious living environment but also appreciates in value over time.

Frequently Asked Questions About Mortgages in Ghana

1. What documents do I need to apply for a mortgage in Ghana?

You’ll need proof of identity (passport or national ID), proof of income (bank statements, employment contract), property documents (sale agreement, title deed), and financial information (credit history, statement of assets and liabilities).

2. How much down payment is typically required for a mortgage in Ghana?

Ghanaian citizens typically need at least 20% of the property value as a down payment, while non-Ghanaians usually require at least 30%.

3. Can non-Ghanaians apply for mortgages in Ghana?

Yes, non-Ghanaians can apply for mortgages in Ghana, though they may face higher down payment requirements and additional documentation needs. Many banks have specific products designed for diaspora Ghanaians and foreign investors.

4. What are the differences between fixed-rate and adjustable-rate mortgages in Ghana?

Fixed-rate mortgages maintain the same interest rate throughout the loan term, providing predictable payments but usually starting at a higher rate. Adjustable-rate mortgages (ARMs) have rates that can change periodically based on market conditions, often starting lower but potentially increasing over time.

5. How can I use a mortgage to buy a property at Sapphire or The Madison?

Landmark Homes has established relationships with several banks offering mortgage products specifically tailored for our developments. The process begins with a reservation and down payment, followed by a mortgage application with one of our banking partners. Our sales team can guide you through each step of the process.

Ready to take the next step toward owning your dream home? Explore the luxurious apartments at Sapphire and The Madison—two of Accra’s premier developments, perfectly suited for mortgage financing. Contact Landmark Homes today to learn how we can help you secure the ideal property with flexible mortgage options.

Contact Information:

• Phone: +233 501 622 422
• Website: landmarkhomesgh.com
• Address: 84 North Labone Street, Accra