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The short answer
Nigerian banks usually ask for 30% to 40% of the property price as equity: Sterling Bank, for example, asks 30% from salaried borrowers and 40% from business owners (as at Oct 2026). PenCom's guidelines let a Retirement Savings Account holder use up to 25% of the RSA balance towards that equity, provided they have 60 months of contributions and more than 3 years to retirement.
The equity contribution, or down payment, is the part of the price you pay yourself. The lender finances the rest. In Nigeria it is usually the single hardest part of buying with a mortgage, because the share is high and you also need cash for fees, insurance and legal perfection on top.
How much lenders ask for
| Lender or scheme | Equity asked | Source and date |
|---|---|---|
| Sterling Bank home loan, salaried | 30% (loan at most 70% of value) | Sterling loans page, Oct 2026 |
| Sterling Bank home loan, business owners | 40% | Sterling loans page, Oct 2026 |
| NHF mortgage via FMBN | Not stated on FMBN's current product page | FMBN, Oct 2026 |
| NHF mortgage, older FMBN guidance | None below ₦5 million; 10% above | FMBN paper, Sep 2018 |
The 2018 NHF equity bands were set when the NHF loan cap was ₦15 million. FMBN's page now gives a ₦50 million maximum, so ask your primary mortgage bank which equity level applies to your loan size today. NMRC's underwriting standards add that self-employed borrowers face higher equity requirements and that the down payment must come from your own funds; money borrowed from a third party cannot count.
Equity is not the whole upfront cost
Sterling advises setting aside about 10% of the property cost for perfection fees paid to government for title transfer and registering the legal mortgage, on top of a 1% commitment fee and insurance (Oct 2026). Valuation and legal fees come on top. Plan for the full figure, not the equity alone.
| Item | Amount |
|---|---|
| Equity (30% of ₦40,000,000) | ₦12,000,000 |
| Perfection set-aside (about 10% of cost) | ₦4,000,000 |
| Commitment fee (1% of the ₦28,000,000 loan) | ₦280,000 |
| Cash needed before drawdown, before valuation, legal and insurance | ₦16,280,000 |
The PenCom 25% RSA equity rule
PenCom's guidelines, issued under section 89(2) of the Pension Reform Act 2014 and set out by pension fund administrators such as FCMB Pensions, allow an RSA holder to use part of their pension savings as mortgage equity:
- Up to 25% of the RSA balance on the date you apply.
- Open to Contributory Pension Scheme and Micro Pension Plan holders who meet the criteria.
- You need a cumulative 60 months of mandatory employer and employee contributions.
- You are not eligible with less than 3 years to retirement.
- If 25% is more than the lender's required equity, you can draw only what is required. If it is less, you must first deposit the difference with the lender.
In the example above, someone with ₦20,000,000 in their RSA could draw up to ₦5,000,000 towards the ₦12,000,000 equity, and would first need to deposit the other ₦7,000,000 with the lender. The money goes to the mortgage lender, not to you. More detail is in using 25% of your RSA for a mortgage.
Ways to raise the equity
- Dedicated savings. Saving a fixed amount each month into an account you do not spend from is the most common route; see how to save for land or a house.
- RSA equity. Up to 25% of your pension balance, as above.
- Cooperative or employer schemes. Some cooperatives help members save towards a home; read housing loans through cooperatives.
- Family gifts. A gift you do not have to repay is your own money; a loan from family is not under NMRC's standards. Lenders may ask for a gift letter.
- A cheaper property or a smaller first home. Equity scales with price, so a lower price cuts both the equity and the fees.
How lenders check the source of equity
Because the equity must be your own money, lenders look at where it came from. Expect to show bank statements covering the months in which it built up, and an explanation for any large single deposit. A sudden lump sum with no clear source can delay approval while the lender completes its anti-money laundering checks, which FMBN's own product page notes apply to its loans. Money that arrived from abroad should be traceable to the sender. Keeping the equity in one account, built up steadily, makes this part of the file quick.
Paying a seller before the lender approves the loan is a common and costly mistake. If the mortgage is refused or the title fails the lender's search, getting a deposit back can be slow. Ask your lawyer to agree in the sale contract that the deposit is refundable if the mortgage is not approved.
What to check first
- Ask the lender, in writing, the equity percentage for your income type and loan size.
- Ask your PFA for your RSA balance and whether you meet the 60-month rule.
- Price the perfection and legal costs in the state where the property sits.
- Keep the equity in naira in an account you can evidence to the lender.
Where Pryme fits
A Naira Fixed or Flexible Savings Box keeps the equity apart from everyday money, with rates shown in the app. If you earn abroad, a multicurrency account keeps pounds, dollars or euros as they are until you choose to Swap into naira with the rate and fee shown first.
Questions people ask
How much down payment do I need for a house in Nigeria?
Banks commonly ask for 30% to 40% of the price; Sterling asks 30% from salaried borrowers and 40% from business owners (Oct 2026). Add roughly 10% of the price for perfection fees, plus valuation, legal and insurance costs.
Can I use my pension for a mortgage down payment in Nigeria?
Yes. PenCom's guidelines allow up to 25% of your RSA balance as equity if you have 60 months of contributions and more than 3 years to retirement. The funds go to the mortgage lender.
Is there zero equity for NHF loans?
FMBN material from 2018 described no equity for NHF loans below ₦5 million and 10% above. FMBN's current page does not state equity, and the cap is now ₦50 million, so confirm with your PMB.
Can I borrow the equity contribution?
Not under NMRC's underwriting standards, which say third-party loans cannot be used for the down payment. Many lenders follow these standards.
Sources
- Sterling Bank: Loans (Home Acquisition Finance Facility, Vehicle & Asset Finance) · accessed Oct 2026
- FCMB Pensions: 25% equity contribution for residential mortgage (PenCom guidelines) · accessed Oct 2026
- NMRC: Understanding NMRC's Mortgage Underwriting Standards for the Formal Sector (16 Mar 2023) · accessed Oct 2026
- Federal Mortgage Bank of Nigeria: NHF Mortgage Loan · accessed Oct 2026
- FMBN paper on NHF products and refunds (Bureau of Public Service Reforms, Sep 2018) · 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.