luxury apartment financing

Ghana’s real estate market, especially in the luxury apartment financing sector, has seen tremendous growth over the past decade. With rising incomes and a growing middle class, demand for high-end and luxury apartments has surged in cities like Accra and Kumasi. For buyers looking to purchase luxury apartments in Ghana, having access to financing is critical. This article explores the various financing options available for luxury apartment purchases in Ghana.

Mortgage Financing

One of the most common ways to finance a luxury apartment purchase is through a mortgage loan from a bank. Most major banks in Ghana, like Ecobank, Stanbic Bank, and FBN Bank, offer mortgage products specifically tailored for real estate financing.

Mortgage loans allow buyers to pay a portion of the apartment financing cost upfront as a down payment, typically 20–30%, and the bank provides the remaining amount as a loan to be paid back over 10–20 years. Banks consider factors like the property value, buyer’s income, credit history, debt levels, and loan-to-value ratio when approving mortgages.

Interest rates on mortgage loans range from 15–25% based on the bank and product. Buyers can get more favourable rates by opting for longer loan tenors. Overall, mortgages provide an accessible financing route for buyers who qualify.

Mortgage Financing Pros

  • Access to large loan amounts to cover the majority of the purchase price
  • Fixed interest rates lead to stability in monthly payments
  • Down payment requirements are reasonable for most buyers

Mortgage Financing Cons

  • Stringent eligibility criteria regarding income, credit score, and debt levels
  • Higher interest rates compared to other products
  • Requires collateral, which is the apartment being purchased

Home Equity Loans

Home equity loans allow luxury apartment financing buyers to use the equity in an existing property they own as collateral for a loan. The equity serves as security for the loan amount.

For instance, if a buyer owns a home worth GHS 500,000 and has GHS 300,000 remaining on their mortgage, their equity would be GHS 200,000. They can get a home equity loan for up to 80% of that equity amount, or around GHS 160,000, to put towards their new luxury apartment purchase.

Home equity loan interest rates are around 17–22%, depending on the lender. While rates are higher, borrowers can access larger loan amounts compared to personal loans. The main requirements are having sufficient equity in the collateral property and stable income streams.

Home Equity Loan Pros

  • Access to larger loan amounts based on available equity
  • Can get up to 80% loan-to-value ratio
  • More flexible eligibility than standard mortgages

Home Equity Loan Cons

  • Higher interest rates than mortgages
  • Risk of losing the collateral property if the loan is defaulted
  • Requires owning a property with sufficient equity already

Personal Loans

Personal loans from banks are an alternative financing option for luxury apartment buyers who want smaller loan amounts. Personal loans are unsecured, so they don’t require collateral. Loan amounts range from GHS 50,000 to GHS 500,000, depending on the borrower’s income and the bank.

Interest rates on personal loans for real estate range between 24 and 30%, and repayment periods are generally 5-7 years. Personal loans have more flexible eligibility criteria than mortgages regarding income levels, credit history, and employment status. The quick approval process also appeals to buyers.

However, the higher rates and smaller loan amounts make personal loans better suited as a supplemental financing source rather than a primary financing method. They work well when combined with other options, like mortgage financing.

Personal Loan Pros

  • A quick and easy approval process
  • Flexible eligibility criteria
  • Unsecured so no collateral is required

Personal Loan Cons

  • Higher interest rates of 24–30%
  • Maximum loan amounts are limited to around GHS 500,000
  • Short 5-7 year repayment periods

Developer Apartment Financing

Many luxury apartment developers offer in-house financing programmes to boost sales. These programmes allow buyers to pay 10–20% upfront and the rest in instalments over 1-2 years as construction progresses, instead of getting financing from banks.

Developer apartment financing is convenient since buyers don’t have to deal with banks and their strict criteria. Interest rates are also very competitive at around 16–18% since the developer handles everything internally.

However, buyers need to be wary of delays in construction, which could disrupt payment plans. There is also the risk of the developer defaulting before finishing the project. Checking developer credentials thoroughly is crucial before entering such arrangements.

Developer Financing Pros

  • Convenient application process through developer
  • Competitive interest rates below 20%
  • Flexible payment structures aligned with construction

Developer Financing Cons

  • Risk of project delays disrupting payment plans
  • Lack of collateral or recourse if the developer defaults
  • Limited transparency and oversight

Pension-Backed Home Loans

An emerging apartment financing option is pension-backed home loans, drawing from the growing pension pot in Ghana. Select pension funds like SSNIT now offer loans to members where their pension benefits serve as collateral.

Loan amounts are based on the member’s contributions to the fund. For SSNIT members seeking luxury apartments, loan limits can reach up to GHS 500,000. The loans have tenors of up to 20 years with competitive rates.

The main advantages are the large possible loan amounts and collateral not being a concern given the use of pension funds. The main drawback is that access is limited to pension fund members with sufficient contributions in their accounts.

Pension-Backed Loans Pros

  • Access to substantial loan amounts based on pension balance
  • Competitive interest rates are around 16–18%
  • Retirement savings serve as collateral

Pension-Backed Loans Cons

  • Limited to members of specific pension funds
  • Require significant pension account balances

Shared Ownership Schemes

Shared ownership schemes being promoted by the government also present a unique luxury apartment financing option. These schemes allow multiple buyers to jointly purchase a high-end property and share ownership.

Each buyer contributes an amount they can afford, such as 10–30% of the property value, to acquire a partial stake. This enables the joint purchase of apartments that would be unaffordable for individual buyers. Shared ownership also allows buyers to gradually increase their stake over time.

The main challenges include the complex legal structures required and managing shared usage rights. But for buyers with limited budgets, it facilitates access to luxury homes.

Shared Ownership Pros

  • Enables purchase of high-value properties through pooled financing
  • Buyers can gradually increase stake over time
  • Lower individual financing burdens

Shared Ownership Cons

  • Complex legal and usage rights management
  • Requires finding suitable partners to share ownership
  • Individuals have limited control over the property

Luxury House Rental Apartment Financing

Along with purchases, luxury house rentals have also surged in Ghana. Rental financing products cater to high-net-worth individuals who prefer leasing high-end apartments rather than buying them.

Some banks offer rental financing loans that cover 1-2 years of advance rent on luxury apartments. The loans help ease the large upfront payments required when starting a rental. Interest rates range from 18 to 22%.

Rental financing enables flexible relocation mortgages without large cash outflows. However, the loans may have large monthly payments, and any unexpected relocation can disrupt repayment. Thoroughly reviewing all loan terms is critical before signing.

Rental Financing Pros

  • Covers large upfront rental payments
  • Enables renting high-end properties flexibly
  • Alternative to rental advances from own funds

Rental Financing Cons

  • Relatively higher interest rates
  • Large monthly payments can be difficult to maintain
  • Early relocation can disrupt the repayment schedule

Choosing the Right Apartment Financing Mix

With the wide range of luxury apartment financing options available, buyers should explore combining different products to create the optimal financing mix aligned with their budget and needs.

Key factors to analyse include the cost of capital, loan amounts required, repayment capacities, eligibility criteria, and risks involved. Consulting reputable real estate advisors and financial planners is highly recommended when deciding on the financing structure.

With the right financing strategy, luxury apartment ownership or rental is now more accessible than ever for Ghanaians looking to enter the high-end real estate market.

Key Factors When Choosing Financing for Luxury Apartments

Cost of Capital

Compare interest rates and fees across mortgage loans, developer financing, personal loans, home equity, and other products. Go with options offering the most competitive overall cost.

Required Loan Amount

Determine if you need one large loan, like a mortgage, or smaller loans to combine through a financing mix. Match loan amounts to your funding needs.

Repayment Capacity

Assess your income streams and budgets to gauge your repayment capacity. Avoid options with uncomfortably high monthly payments.

Eligibility Criteria

Review qualification criteria for income, credit history, collateral, and other requirements. Opt for products you are most likely to get approved for.

Risks Involved

Evaluate risks like project delays, interest rate hikes, or losing collateral. Manage risks by diversifying across multiple products and lenders.

Luxury Apartment Financing Mistakes to Avoid

Purchasing a luxury apartment is a major financial decision. Buyers should be aware of these common mistakes others have made so they can avoid making the same errors.

Not Considering Total Costs Beyond Purchase Price

Luxury apartments come with high maintenance, utility, and community fees on top of just the purchase price. Not factoring in these additional costs can stretch your budget to the limit.

Opting for an Unrealistic Payment Plan

Payment plans that overextend your monthly budgets increase the risk of defaulting. Be realistic about your repayment capacity when choosing financing options.

Not Reading the Fine Print on Agreements

Many make the mistake of glossing over the terms and conditions. Read all agreements thoroughly so there are no surprises later regarding fees, penalties, etc.

Not Accounting for Interest Rate Risks

When interest rates rise, financing costs increase. Have buffers and contingencies in your repayment plans in case of rate hikes.

Overlooking Developer Background and Reputation

For developer financing, extensively research the developer’s credentials and track record. Don’t compromise on quality.

Relying Completely on A Single Financing Source

Diversify your financing mix across products and lenders to minimise risks. Don’t become overly dependent on just one source of capital.

Not Consulting Finance Experts

Seeking professional guidance from mortgage advisors, lawyers, and financial planners is critical. Their input helps avoid costly errors.

Failing to Readjust Plans When Personal Situation Changes

Update your financing approach to reflect material changes in income, costs, family obligations, etc. Be adaptable.

Not Accounting for Major Repairs and Renovations

Allocate separate funds for near-term upgrades, repairs, and renovations. Don’t divert too much to purchase financing.

Not Considering Resale Value Scenarios

When deciding on financing, also consider eventual resale value, ease of selling, and loan repayment.

Outlook for Luxury Apartment Financing in Ghana

The demand for luxury apartments in Ghana is expected to continue rising as incomes grow. This presents lucrative opportunities but also financing challenges. Here is an outlook on key trends shaping luxury apartment financing:

Increasing Developer Financing Options

Developers will introduce more innovative in-house financing plans to boost sales. Buyers will have greater flexibility in payment structures aligned with construction.

Lower Mortgage Rates

Banks will offer more competitive mortgage rates for high-end properties as competition intensifies. Rates may dip into the low teens for the best customers.

More Securitization

Lenders will package and securitize bundles of luxury apartment financing mortgages. This will improve liquidity and enable lower financing costs.

Shared and Fractional Ownership Growth

Shared and fractional ownership models will gain popularity as more creative ways to finance luxury homes jointly.

Rise of Real Estate Investment Trusts

REITs democratise luxury apartment financing through fractional ownership of property portfolios. REIT growth will open up financing avenues.

Stricter Lending Standards

Despite the competition, lenders will still maintain stricter approval criteria for luxury borrowers regarding income, credit, and collateral.

Greater Foreign Investment

Foreign banks and investors will increasingly target Ghana’s luxury real estate market. This will bring more financing options from abroad.

The right financing strategies and professional advice will be key to smoothly navigating Ghana’s evolving luxury apartment financing market in the coming years. Staying updated on the latest financing trends is highly advisable.


Purchasing or renting luxury apartments in Ghana’s metropolitan areas offers an aspirational lifestyle but requires careful financing planning. Mortgages, home equity loans, personal loans, developer financing, pension-backed loans, shared ownership, and rental financing provide options to cover the substantial costs involved.

Key factors to consider when selecting apartment financing include the cost of capital, loan amounts required, repayment capacities, eligibility criteria, and inherent risks. Consulting experts and diversifying across multiple products helps develop an optimal financing mix. Proper budgeting, realistic payment plans, and adapting to personal situation changes are also critical for success.

While rising interest rates and stricter lending standards present challenges, innovative developer offerings, lower mortgage rates, greater securitization, and increased foreign investment should improve access and affordability of luxury apartment financing in Ghana moving forward.

Purchasing a luxury apartment is an exciting yet challenging process. Proper financing planning is key to make your luxury home dreams a reality. VAAL Ghana has the expertise to guide you through evaluating the best financing options for your situation.

Our team of seasoned real estate advisors will help analyze your budget, lifestyle needs, repayment capacities, and eligibility for competitive mortgage rates. We assist with reviewing all agreements and fine print to avoid surprises. You can trust VAAL Ghana to create a tailored financing strategy with the optimal mix of loans and payment plans to smoothly finance your dream luxury apartment.

Don’t leave it to chance. Contact VAAL Ghana today to get started on planning your luxury apartment financing. Our guidance will save you time, money, and hassles as you embark on this major investment in your lifestyle. Call or email us now to schedule your initial consultation. Let’s make your luxury apartment aspirations come true!


What credit score is required for financing a luxury apartment in Ghana?

Most lenders will require a minimum credit score of 650–700 to qualify for luxury apartment financing. Some lenders may approve borrowers with scores above 600 who have a strong income and meet other criteria.

How much should I budget annually for maintenance and utilities for a luxury apartment?

Plan for 5–10% of the apartment’s value annually for maintenance fees, utility costs, taxes, insurance, and other bills. Luxury amenities can incur higher utility bills.

Are there tax incentives available for luxury apartment buyers in Ghana?

Yes, Ghana’s tax code allows mortgage interest and property tax deductions for primary residences. High-value homes above GHS 3.5 million are charged only 0.5% in property taxes versus 1-2% for lower-priced properties.

What percentage down payment is typical for a luxury apartment mortgage?

Most lenders will require 20–30% as a down payment for mortgages on luxury apartments worth above GHS 1.5 million. Lower down payments may be accepted with additional fees or guarantees.

Can I use rental income from my luxury apartment to help qualify for financing?

Yes, lenders can factor a portion of the projected rental income, around 70–80%, from the luxury apartment into your debt-to-income calculations when applying for financing.