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The short answer
When you default on a Nigerian mortgage, the lender’s remedies come from your mortgage deed and the property law of your state: usually a power to sell the property, to appoint a receiver to collect rent, or to go to court. In Lagos, the Mortgage and Property Law 2010 regulates how the power of sale is exercised and how sale proceeds are applied, so any surplus after the debt and costs belongs to you; this is general information, not legal advice.
What counts as default
Default is whatever your mortgage deed says it is. Most deeds treat as default: missing one or more instalments, failing to insure the property, letting it out or selling without consent, or another breach of the deed’s covenants. The deed also usually says how much notice the lender must give before acting and how long you have to put things right. Find your copy of the deed now and read the default and enforcement clauses; they matter more than any general rule.
The lender’s main remedies
| Remedy | What happens | What you can do |
|---|---|---|
| Demand and notice | The lender writes demanding the arrears and warning of enforcement | Respond in writing, pay or propose a plan |
| Restructuring | The lender agrees new terms: longer tenure, a payment break, capitalised arrears | Ask early; lenders often prefer this to a sale |
| Receivership | A receiver is appointed to collect rent or income from the property | Rent goes to the debt; you keep ownership for now |
| Power of sale | The lender sells the property, often without first going to court, if the deed and law allow | Check the notice was valid; claim any surplus |
| Court action | The lender sues for the debt or an order over the property | Defend, or seek a settlement |
The Lagos Mortgage and Property Law 2010
Lagos is the state most buyers ask about, and it has its own law on mortgages. The Mortgage and Property Law 2010 contains sections on these points, among others (section headings from the Law’s table of contents):
- Section 35: powers incidental to the mortgagee’s interest, including to sell, insure and appoint a receiver.
- Section 37: regulation of the exercise of the power of sale.
- Section 39: application of the proceeds of sale.
- Section 40: exercise of the power of sale.
- Section 43: appointment, powers, remuneration and duties of a receiver.
- Section 27: power of the court to refer disputes to the board for mediation or arbitration.
- Section 53: filing of mortgage instruments.
We have not quoted the notice periods because we read the Law’s contents rather than its full text. Ask a Lagos property lawyer to check the notice you received against section 37 and your deed. Outside Lagos, each state’s own property laws and the general law apply, so the rules can differ.
Your rights if the property is sold
- Proper notice. A sale without the notice your deed and the law require can be challenged.
- Fair conduct of the sale. Ask how the property was valued and marketed.
- The surplus. The proceeds pay the lender’s costs and the debt; anything left over is yours. Ask for a written account of the sale.
- The shortfall. If the sale raises less than you owe, the lender may pursue you for the balance.
- Paying off before sale. Until the property is sold, paying the full amount due normally stops the process. Ask for a redemption statement.
Worked example
Example only. You owe ₦28,000,000 including arrears and interest. Enforcement costs (legal, auction, agent) come to ₦1,500,000. The property sells for ₦35,000,000. The lender takes ₦29,500,000 in total; the surplus of ₦5,500,000 should be paid to you. If instead it sold for ₦25,000,000, the shortfall would be ₦4,500,000, which the lender could pursue.
A rushed sale is rarely good for either side. Selling the property yourself, with the lender’s agreement, usually achieves a better price than a forced sale.
Steps if you are falling behind
- Contact the lender in writing before the first missed payment, not after the third.
- Explain the cause (job loss, illness, business slowdown) and how long it may last.
- Ask for options: payment break, tenure extension, reduced payments, sale by agreement.
- Get any agreement in writing.
- If you receive a demand or sale notice, see a property lawyer promptly.
- Keep paying what you can; partial payment shows good faith and reduces arrears.
Early repayment and refinancing are covered in paying off a mortgage early and the costs of a mortgage over time in a mortgage repayment worked example. Sterling Bank’s loans page, for one, lists its home loan with no prepayment penalty, as at October 2026.
Where Pryme fits
A Flexible Savings Box can hold a reserve of several months’ instalments so a bad month does not become a default, and the Personal Assistant can prepare each payment for you to approve.
Questions people ask
Can a bank sell my house without going to court in Nigeria?
Often yes, if the mortgage deed gives a power of sale and the conditions in the deed and state law, including notice, are met. A lawyer can check whether they were.
What happens if my house is sold for more than I owe?
After the lender’s costs and the debt are paid, the surplus belongs to you. In Lagos, the Mortgage and Property Law 2010 regulates how proceeds of sale are applied.
How many months of missed mortgage payments before foreclosure?
It depends on your deed and state law. Read the default and notice clauses in your deed, and speak to the lender before you fall behind.
Can I stop the sale of my mortgaged property?
Paying the full amount due before the sale normally ends the process. You can also challenge a sale if notice or procedure was not followed; take legal advice.
Sources
- LawGlobalHub: Mortgage and Property Law of Lagos State 2010 (contents) · accessed Oct 2026
- FMBN: Rent to Own (PDF) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.