The mortgage rate regime when the Nigerian Mortgage Refinance Company (NMRC) eventually becomes operational will depend substantially on prevailing monetary policy rates.

Mr. Sonnie Ayere, CEO of NMRC, stated this in an interview on a cable television programme. He asserted that the hope of many Nigerians for single digit mortgage rates will depend largely on the monetary policy going forward.

“If for instance, MPR rates go down to six percent like it was before it took that dramatic rise, if it goes back to six percent, then you can expect mortgages will fall within the single digits. As you know, subsidies are not very sustainable. What we want to have is a model that from day one, is sustainable and that is why we wanted something that to a certain extent is market driven,” he explained.

On the seeming delay in the take-off of the NMRC since its launching in January, Ayere noted: “Since the launch, the company has embarked on its capital raising, we have also concluded the tier 2 loan from the World Bank and I can say that the tier 1 capital raising was successful. We are expecting to operationalise by the end of June, that’s the promise we gave to the Nigerian public and that was given by the Minister (of Finance). We are on track to achieve that, the board has been constituted, there’s been several board committee meetings etc., so there’s a lot going on,” he said.

The NMRC boss noted that though the company may not be able to eradicate the huge housing deficit in the country, it would help significantly. “As you know, there are other issues that need to be resolved, foreclosure tightening, etc. We are working on that,” he added.

Nigeria’s housing deficit is currently estimated at about 17 million units and is adding to that at the rate of two to three million units a year. The World Bank estimates the cost of bridging that gap to be N59.9 trillion.

The NMRC was launched in January by the Federal Government to create access to cheap funds by housing finance lenders. It is expected to boost Nigeria’s current housing stock by raising mortgages from an annual average of 20,000 mortgages to at least 200,000 in the next three years.

According to terms of operation, the company will provide low interest housing loans to middle income earners in the country to enable them own their own homes.