Which Banks Support Your Mortgage Plan?

By Cecil MENSAH

Even though Ghana is said to have a housing deficit of over one million, the 33 commercial and universal banks operating in the country appear to continue to show disinterest in the mortgage sector of the economy.

Out of the 33 commercial and universal banks reported on by the Bank of Ghana at end of July, only eleven banks showed considerable interest in the mortgage sector of the economy.

Per the BoG's report, it is advisable to stay away from following banks if you are looking for mortgage: Access Bank, ABD, BSIC, Energy Bank, First Atlantic Bank, FBN Bank Ghana, First National Bank, GCB Bank, GN Bank and Guaranty Trust Bank.

Other banks which do not offer mortgage facilities are Heritage Bank, National Investment Bank, Omini Bank, Premium Bank, Sovereign Bank, Standard Chartered Bank, Societe Generale Bank, Bank of Africa, Universal Merchant Bank, Unibank and Zenith Bank.

When considering banks which offer mortgages, the BoG's report on Annual Percentage Rate and Average Interest Rate Paid on Deposits for the month of July indicates that the industry average for mortgage was s a little over 31 per cent.

The BoG report has it that Royal Bank has the highest percentage rate for mortgage, with interest rate range of 35 to 40 per cent. Bank of Africa comes next with a fixed 36 per cent.

Barclays Bank (34%), Ecobank (34%) and the now-defunct UT Bank (33%) completed the most expensive list of five.

Prudential Bank recorded an average of a little over 33% with rebranded Cal Bank doing an average of 31%.

Other rates are Fidelity Bank (29%), HFC (26%), Stanbic Bank (26%) and Bank of Baroda (22 to 28%).

It is predicted that the banks' apparent disinterest in the mortgage sector will spur on property owners in urban areas to continue to charge astronomical rents in the country.

Even though there is a Rent Act that demands that property owners charge rent advance for a maximum of six months (for residence) and three months (for businesses), weak supervision has ensured that property owners continue to demand a minimum of two years' rent advance.

The rent industry so unregulated, coupled with the lack of mortgage facilities, also facilitates some individuals who parade themselves as agents who carry prospective tenants to inspect properties being rented at a fee and later charge ten per cent on the amount as agent fees.

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