Securing a mortgage can be an overwhelming process. With the fluctuation of the dollar rate in the past year banks have been forced to maintain a high interest rate in order not to acquire many losses and this has also led to many people staying away from mortgages. Shakib Nsubuga, Country Manager of Lamudi in Uganda, said: “ Last year we saw interest rates as high as 24 percent but this year we hope to see them go as low as 16 percent and this will hopefully be beneficial for both the banking and real estate sector”

To help take the stress out of selecting a home loan we have prepared a mortgage guide for property seekers.

According to the Housing Finance Bank, loan sizes must be a minimum of five million shillings depending on the property, location and value. The loan available should not exceed 70 percent if constructing a residential property, 80 percent for purchase of property within Kampala and 30 million shillings for a continuing house loan.

It is crucial that you make sure that your loan purpose is clear before you go to a bank or financial institution to request for a loan. The loan purpose could be construction, purchase, extension or improvement of residential and commercial properties, as well as the purchase of a plot.

For the bank to ensure that the mortgage is affordable, the monthly repayment amount should not exceed more than 35 percent of your income. Where income is not sufficient, security or collateral may be required and the bank will confirm income from your stated employer. Self-employed borrowers are usually required to submit proper identification, audited accounts for at least the last two financial years, a Memorandum of Understanding and Articles of Association, Certificate of Incorporation and their company’s returns.

The property that you wish to purchase must also have a valid land title and building plans with approval from Kampala Capital City Authority if it is within Kampala. Construction must be serviced with water or plans for installation must be in place.

Repayment of mortgages usually should not take more than 20 years for residential and commercial properties. The interest rate on all mortgages in Uganda depends on current economic conditions and the central bank rate set by the Bank of Uganda. Many banks in Uganda will insure the mortgage for you at a fee should you be unable to pay off the loan within the given period of time.

It is also important to know that banks do not provide mortgages for land however you can acquire a salary loan from the bank and then use it to buy the land.

For more information on securing a mortgage or if you need advice call  0800226834 or visit to access the mortgage calculator.

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