Comparing a 6.88% 10-year fixed mortgage in Nigeria

[UmaBirch]

I have checked the monthly payments and included the initial charges, but the value of the flexibility is still unclear. This is for a Lagos purchase of roughly NGN 1,356,000,000, with one offer at 6.88% fixed for 10 years.

The quotes are close on the monthly figure after allowing for their different loan-to-value bands. One could be better if I keep it for the whole decade, while another may work better if I refinance after, say, five years. That makes portability, early-exit costs and any rate-reset exposure more important than the advertised percentage alone.

Would you compare the offers at several possible exit dates, or first choose the most likely holding period and optimise for that? I also need to establish whether each arrangement charge is fixed or linked to the loan amount.

 

[finn_reese]

The likely exit date is the practical constraint here. I would calculate the amount paid by year five and by year ten, including charges, principal repaid and any penalty for leaving at those points. That shows whether the apparent flexibility has real value or only helps under a narrow scenario.

A refinance case can reduce the projected cost, but it also assumes another suitable loan will be available then. Staying for the full fixed period avoids that assumption, although it may leave you paying more if your plans change.

Ask each lender for the fee schedule and the exact clauses covering early repayment and portability. Those documents should also confirm whether the charge is a flat sum or a percentage of NGN 1,356,000,000.