What Is Land Banking & How Is It Better Than Traditional Banking?

I just felt this should add to our knowledge in making decision about Real Estate investment amidst the uncertainty of a traditional financial market.

The name “Land Banking” implies almost exactly what it is. Rather than putting cash into a savings account (where it will earn a maximum of 3% interest every year, after you have paid more on charges) or the stock market (which has become increasingly unpredictable in recent years), some smart entrepreneurs have taken an alternative approach by acquiring LAND and in doing so, they have chosen to park their cash in a tangible, fixed asset – one that cannot be broken, stolen or destroyed.

According to Moneysmart.gov.au – “Land banking is a real estate investment scheme that involves buying large blocks of undeveloped land with a view to selling the land at a profit when it has been approved for development.”

Landing banking as an alternative strategy to saving your idle cash in a bank is the process of converting your cash into a physical asset (landed properties) with the purpose of recouping what portfolio and an additional return on price appreciation. The basic step to embarking on land banking is when you purchase vacant land in strategic locations.

What is Land Banking

Read – Best place to buy your next land in Lagos and enjoy a fast return on investment.

Vacant land gets ignored by most new investors because let’s be honest – it just doesn’t sound that exciting. Unfortunately, this causes most people to overlook a lot of the advantages that land has over traditional real estate investments (e.g. – houses, apartment buildings, commercial properties, etc.). Unlike most residential and commercial buildings, land costs virtually nothing to own, no utility payments, no tenant problems, no termite infestations, no leaky faucets, no broken toilets, no mortgage payments. A building could even gut fire and if without insurance, it’s a total loss for the owner. A vacant land would be impossible for destruction or loss but rather appreciates on value month after month.

Think about this, you can buy a piece of vacant land today, walk away from it for 10 years and when you come back, nothing will have changed. Can you think of a safer investment like this?

Also, think about the economics of land, this is a resource with a supply that is always going down (after all, they aren’t making any more of it) and a demand that is constantly on the rise. Given the value proposition that comes with owning land, I often find myself scratching my head and wondering “Why aren’t more investors involved in Lands Banking??”

See – Things to consider before buying your next land in Lagos.

But before you get started, I’d advise you read this guide on how to know whether a land for sale in Lagos is genuine. This article contains important information on land purchases in Lagos.

For inquiries on how to buy a land at an affordable price with available properties for sale, you can contact our client service centre on +234-808-421-9399

Best Mortgage Rates & Housing Financing In Nigeria

Are you looking for the best mortgage rates in Nigeria with affordable home equity contribution for middle and low-income earners in Lagos Nigeria? Here are loan rates you can compare.

Note: This article is for those who already own land at a prime location and those looking to buy their dream home.


We all want to get the cheapest financing package for our dream home at better rates because a lower repayment fee makes it flexible for one to pay back which could even lead to a higher loan request from a commercial bank in Nigeria.

In this review of the best property financing article, I will be comparing three mortgage institutions in Nigeria and their home equity contribution so that you can decide which is better for your need.

Generally, commercial banks in Lagos Nigeria charge a double-digit interest rate on home loan advances to real estate or property investors. There rate range from 20%-27% per annum as at the time this post was published.

best mortgage rates in Nigeria

Best Mortgage Rates In Nigeria – Housing Loan & Financing From Banks

Let’s start with Standard Chartered Bank Nigeria Home Loan.

  • The home equity loan rate is 17.9% per annum
  • The minimum equity contribution is 20% of the property value for a maximum of 20 years.
  • The applicant shall not be less than 23 years or more than 60 years.
  • The property must be within Lagos or Abuja.

Another place you can check is Federal Mortage Bank of Nigeria via National Housing Fund

  • The loan is subject to a maximum finance rate of 6% per annum
  • The equity contribution is based on the loan portion of the mortgage finance.
    • N15,000,000.00  –  30%
    • N10,000,000.00  –  20%
    •   N5,000,000.00  –  10%
  • The property should have sufficient fair value to recover the loan and be within an existing law with an approved building plan.
  • The applicant is expected to have contributed towards a National Housing Fund for a period not less than 6 months.
  • The applicant should have a satisfactory and guaranteed flow of income regularly.
  • The maximum repayment period of the loan is 30 years.
  • Read full NHF housing and home loan guideline.

The third is First Bank Personal Home Loan

  • The loan is available to employees of First Bank list of approved employers.
  • The loan is repayable within 20 years as long as the applicant is not more than 60 years.
  • Minimum equity contribution is between 20-30% depending on where the property is.
  • Only residential properties are financed, not for commercial use.
  • Minimum and maximum loan amount are N1 million and N50 million.
  • Find more information on FBN home financing.

While these are the best mortgage rates in Nigeria, you can also talk to your mortgage banker for more tips and advice.