WorldStage Newsonline– Kaduna State Government and Sterling Bank have announced plans to jointly fund a N5 billion mortgage scheme to facilitate home ownership in the state to provide mortgages at single-digit interest rate.
The Special Adviser on Economic Matters to the Governor of Kaduna State, Umma Aboki said at a press briefing in Kaduna today that the state was facilitating investments in the provision of mass housing.
“To encourage more people to own homes, we also have to support the demand side through mortgage financing. I am happy to announce that Kaduna State is partnering with Sterling Bank to deliver an affordable, single-digit interest mortgage facility,” she said.
Umma Aboki added that successful bidders in the sale of government houses programme can apply for the mortgage facility to help pay for the houses.
Garba Mohammed, Group Head of Non-Interest Banking of Sterling Bank, said that the bank had executed a Memorandum of Understanding(MoU) with Kaduna State to provide the mortgages at 9.5% per annum.
He explained that the two parties will each contribute 50% of the mortgage fund which is billed to reach N5bn for onward lending to aspiring home owners.
Mohammed disclosed that the single-digit interest rate on the mortgage product was achieved by Kaduna State sacrificing the interest on its own part of the deposit.
He said that 50% of the mortgages will be used to support house purchases below N20m, while home purchases valued up to N30m will get 30% of the funding. The balance of 20% will support home purchases above N30m up to a limit of N60m.
The mortgages will require beneficiaries to make security deposits of between 15 to 30% of the value of the houses they intend to purchase, but all mortgages must be liquidated within 10 years.