CBN Reports Increase in Housing and Mortgage Credit Demand

Mortgage demand rises in Nigeria.

Demand for housing-related credit increased in the second quarter of 2026, with households seeking more financing for house purchases and mortgage or re-mortgage lending, according to the Central Bank of Nigeria’s (CBN) Credit Conditions Survey.

The CBN data shows that credit for house purchases by households rose to 9.6 index points in Q2 2026, while demand for mortgage and re-mortgage lending increased by 13.3 index points.

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Demand for house-purchase credit rises

The increase in house-purchase credit demand indicates stronger interest among households in using formal financing to acquire residential property.

The 9.6 index-point reading reflects increased demand for loans specifically intended for house purchases during the quarter. The development comes despite continued pressure on household incomes and elevated borrowing costs.

For Nigeria’s housing market, the shift is significant because limited access to long-term finance remains one of the major constraints on homeownership.

Mortgage and re-mortgage demand strengthens

Demand for mortgage and re-mortgage lending recorded an even stronger increase, rising by 13.3 index points during the quarter.

Mortgage financing allows households to spread the cost of property acquisition over a longer period, while re-mortgaging can allow existing property owners to refinance their obligations or unlock equity tied to their homes.

The increase suggests that more households are considering formal credit as a means of accessing or managing housing assets.

Banks report improving credit conditions

The increase in housing-related borrowing formed part of a broader rise in credit demand recorded by banks during the quarter.

The CBN survey also indicated increased demand for secured and unsecured lending from households and businesses, while lenders reported declining default rates.

Lower default rates could improve banks’ willingness to extend credit if the trend continues. Stronger repayment performance reduces lending risks and could encourage financial institutions to expand their loan portfolios.

High interest rates remain a constraint

Despite the increase in demand, the cost of borrowing remains a major consideration for prospective homeowners.

Higher lending rates can significantly increase the total cost of a mortgage, particularly for households seeking long-term financing.

This creates a gap between demand for housing credit and effective affordability. A household may qualify for financing and still struggle to service a mortgage if monthly repayments consume too much of its income.

The sustainability of the current increase in housing credit demand will therefore depend partly on borrowing costs, household income growth and banks’ lending conditions.

Housing finance could support property development

Growing demand for mortgage credit could have wider implications for Nigeria’s housing supply.

Mortgage financing can increase the pool of potential buyers, giving developers greater confidence that completed housing units can find buyers through structured financing rather than relying entirely on cash transactions.

Greater access to credit can also support construction activity by improving the connection between developers, homebuyers and financial institutions.

The CBN has previously identified access to consumer credit and mechanisms that can encourage private investment in housing as part of its reform agenda.

Improved credit quality could benefit lenders

The reported decline in default rates provides another important signal for the mortgage market.

Banks face significant risks when lending over long periods, particularly when borrowers have unstable incomes or when economic conditions change rapidly. Lower defaults could give lenders greater confidence in expanding secured lending.

However, mortgage lending requires longer-term funding structures than conventional short-term bank deposits can easily provide. The expansion of housing finance will therefore also depend on the development of mortgage refinancing and capital-market mechanisms that provide lenders with longer-term liquidity.

More credit does not automatically mean more affordable housing

The increase in housing credit demand represents a positive signal for the property market, but it does not by itself resolve Nigeria’s housing affordability challenge.

If property prices continue to rise faster than household incomes, increased access to mortgages could simply allow more buyers to finance increasingly expensive homes.

The supply side therefore remains critical. More affordable housing units, lower construction costs, improved land administration and longer-term financing will be necessary to translate stronger credit demand into broader homeownership.

Implications for developers and investors

For developers, stronger demand for housing finance could expand the pool of potential buyers and improve the viability of projects targeted at mortgage-eligible households.

Developers may also have greater incentive to structure projects around formal mortgage products rather than focusing exclusively on high-income cash buyers.

For investors, the development could signal improving liquidity within Nigeria’s residential property market. However, investment decisions will still need to account for interest rates, property prices, rental yields, construction costs and the creditworthiness of prospective buyers.

Outlook

The CBN’s Q2 2026 data points to growing demand for formal housing finance, with house-purchase credit rising to 9.6 index points and mortgage and re-mortgage demand increasing by 13.3 index points.

The trend could support Nigeria’s housing market if banks continue to expand lending while maintaining prudent credit standards.

The larger opportunity lies in converting increased credit demand into actual housing supply. Sustained growth in mortgage finance, combined with lower financing costs, stronger construction activity and more affordable housing delivery, would provide a stronger foundation for expanding homeownership across Nigeria.

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