The Central Bank of Nigeria (CBN) has reduced the Monetary Policy Rate (MPR) by another 50 basis points to 25.75% at its January 2026 Monetary Policy Committee (MPC) meeting — the second cut of the year following the earlier reduction from 27.25% to 26.25%.
This continued easing signals the CBN’s confidence that inflation is moderating (from 34.8% peak in Dec 2024 to ~24–26% range in early 2026) and opens the door for lower borrowing costs across the economy, particularly in real estate.
Expected Impact on Mortgage Rates (Q1–Q2 2026)
- Commercial Banks (Tier-1: GTCO, Zenith, Access, UBA, Stanbic IBTC)
- Current range (pre-cut): 20–23%
- Projected 60–90 days: 18–21%
- Example: ₦100M loan over 15 years
- Old rate (21%): monthly ≈ ₦970k
- New rate (19%): monthly ≈ ₦900k–₦920k
- Monthly savings: ₦50k–₦70k (~₦9M–₦12.6M over loan life)
- FMBN Renewed Hope Cities/NHF Scheme
- Current rate: 9.75% fixed (first 5 years)
- Projected: 8–9% by Q2 2026
- Example: ₦30M loan over 20 years
- Current: monthly ≈ ₦280k–₦290k
- At 8%: monthly ≈ ₦260k–₦270k
- Savings: ₦10k–₦20k/month
- Hybrid Strategy (Most Popular in 2026)
- Max FMBN loan (₦50M @ ~8–9%) + commercial top-up for balance
- Blended effective rate: 12–16% (vs 18–21% straight commercial)
- Real example: ₦120M Lagos flat buyer blended rate 14.5% → monthly payment drops from ₦1.15M to ₦1.02M after recent cuts
Best Loan Options in February 2026
- First-time / affordable buyers (₦30–60M)
- 100% FMBN Renewed Hope (9.75% → potentially sub-9%)
- Equity: 10–30%
- Max loan: ₦50M
- Best for: ₦30–50M units
- Mid-market buyers (₦80–150M)
- Hybrid: FMBN max + commercial top-up (18–21%)
- Blended: 12–16%
- Best for: Lagos/Abuja mid-range flats/houses
- Luxury / high-value (₦200M+)
- Developer financing (12–18% effective) or dollar-linked diaspora loans (8–14%)
- Commercial straight still viable but least attractive
Action Steps for Buyers in February 2026
- Pre-qualify with FMBN + 2 commercial banks now (rates may drop further)
- Lock fixed/semi-fixed portions if buying off-plan (many developers freeze rates on deposit)
- Refinance existing loans above 20% — savings can be massive
- Factor in 2–3% processing/insurance fees
Final Thoughts
The second MPR cut to 25.75% in January 2026 is the clearest signal yet that borrowing costs for real estate are steadily declining.
For buyers, this is the window to lock in long-term financing before possible further cuts or reversals.
Smart positioning now (FMBN max + commercial top-up hybrid) can save millions in interest over the loan life.
Are you planning to buy or refinance in 2026? What’s your target loan size or strategy? Share below!
Disclaimer: This information is for general purposes only and not legal advice. Consult a qualified real estate lawyer for guidance.
Join Over 11,000 Real Estate Enthusiasts! Stay ahead with our quick 5-minute roundup of Nigerian and global real estate updates, delivered to your inbox every weekday. Don’t miss out on insider tips, market trends, and exclusive listings!
