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Learn about Mortgage

Mortgage Pre-Approval

Obtaining a mortgage in Zambia is a very straight forward process. Each financial institution has their own requirements but in general they require you to be a Zambian resident, between the age of 21 and 55, as well as have a legitimate source of income. The documents you must provide them is a valid passport, a latest play slip which should be signed by your employer, a utility bill to confirm your address, bank account statements from the last three months, an employment contract, and any statements from any of your other current loans.

Mortgage Interest Rate

Mortgage rates have recently been readjusted and have dropped from 19.5% to 12% per year. This is to make mortgages more affordable, so that more Zambians obtain mortgages. The intention is to drop this further.

How Does Refinancing Work?

Refinancing is available in Zambia and also has a similar process as obtaining a mortgage. You must provide the same documentation i.e. a valid passport, a latest play slip which should be signed by your employer, a utility bill to confirm your address, bank account statements from the last three months, an employment contract, and any statements from any of your other current loans.

Frequently Asked Questions

What is a mortgage?

A mortgage is a loan that buyers can use to purchase a property, and that is secured against the property itself. If buyers cannot repay the debt, then the lender takes possession of the property.

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What is the maximum amount I can borrow?

The total amount you can borrow usually depends on your debt-to-income ratio or credit score, which is determined by the borrower's ability to repay their debt and their credit history. The monthly payment should generally not be more than a third of the borrower's gross income.

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Where can I get a mortgage?

Always use certified financial institutions, such as banks or credit unions, to avoid any scams.

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What are the different fees that apply?

The fees depend on the type of financial institution, but in addition to reimbursing the capital - the amount of money that was lent - borrowers usually need to pay interest every month that can be negotiated with the bank.

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What is the difference between a fixed and an adjustable interest rate?

In a fixed-rate loan, the interest rate remains the same for the whole duration of the loan. In adjustable-rate mortgages, the rate varies depending on the economics and monetary policy of the country.

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What happens if I cannot pay my debt?

The lender may foreclose and seize the property, which will become their possession.

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Do I need mortgage insurance

Usually no. However, if the amount of money needed is very high compared to your income or your capital, then financial institutions will ask you to take out mortgage insurance.

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What is the best time to get a mortgage?

You should wait until you have a regular source of income to take out a mortgage. A period of high inflation is also usually beneficial for debt owners, since inflation reduces the debt burden in real terms, and debts are generally not indexed to inflation.

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How much capital do I need to be granted a mortgage?

The more capital you bring, the lower your interest rate will be. Banks usually require a minimum amount of capital, often around 20 percent of the total amount of the loan.

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How does Refinancing Work?

Refinancing takes the current debt and changes its terms and conditions into an entire new different debt, with new obligations.

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