How to get a mortgage in Rwanda is always one of the key questions when buying a house or an apartment. In this article, we laid out for you how the process of applying for a mortgage works in Rwanda, and what documents you need for that.
First, you dream of buying a car. Then you dream of buying your first home. Whether the order was in reverse for you, this is a decision that you most likely have thought about. Buying a house is a considerable financial investment and almost always requires a mortgage to help pay for it.
Often times, buyers struggle with the question of how to get a mortgage, and what documents the banks will require to approve it.
But let’s start for the beginning: What is a mortgage? A mortgage is a loan from a bank that allows you to buy or build a property with that property acting as collateral in case you default. Typically mortgages have a repayment timeframe of between 20 years and 30 years. Most banks in Kigali also offer options for diaspora banking and an option to refinance. A refinance is a loan acquired using the equity from the partial repayment of the initial mortgage.
With most lenders requiring a downpayment of at least 20%, it is important to understand your finances and decide if it is the right time to apply for a mortgage. The better your financial situation is, the less you will have to pay upfront, and the lower the interest rate you can get from a bank. In this guide on how to get a mortgage in Rwanda, we walk you through the necessary documents you will need to apply for your mortgage and explain how they can each make your application stronger.
Here’s what you need to get a mortgage in Rwanda:
1. You must have an account with the bank
It is possible to apply for a mortgage with a bank you have not banked with before but you are required to open an account with them. Having banked with the bank previously is a plus that makes the approval process easier. It is therefore advised to apply to your main bank if it has favorable terms.
To learn more about the terms and conditions of different banks in Rwanda, please refer to their website or visit the nearest branch. You can for instance schedule an appointment with a mortgage specialist at Bank of Kigali at the following link. If you are a diaspora looking to buy a house in Kigali, take a look at some financing options with KCB and Equity Bank.
2. Work Contract
Most banks in Rwanda require you to submit a work contract to determine that you have a steady income and how much you earn. This must be an employment contract that demonstrates you are beyond the three months of probation.
3. Bank Statement
A bank statement comes to corroborate the fact that you do receive the income stated in the work contract. This document is also a pulse check for your financial fitness as it shows how you spend your money with the frequency of your deposits.
It can also alert the bank of any abnormal behaviors such as heavy withdrawals. Banks usually request a statement for the last 6 months to 1 year of constant income.
4. Certificate of marriage or celibacy
The proof of celibacy or marriage helps the bank understand better your status. Your status can indicate that you have a partner that can help you pay back the loan. On the other hand, it can mean that you likely have fewer expenses than a married couple. You can get both certificates through the Rwanda Governance Board via Irembo at this link
5. The sales contract between the seller and the buyer
The remaining documents are less about your financial fitness and more about the property you are interested in buying or building. The bank reserves the right to know that you have come to an agreement with the seller to sell you their property. For this, you are required to submit a sales contract. This contract must include the price at which the seller is selling you the property and other payment terms agreed upon.
As you think of buying a house in Rwanda, take a look at the 5 things to consider before you sign that contract.
6. Evaluation Report of the property from a valuer presented by the bank
The bank also requires an evaluation report of the property from its own valuer. You may have been sold a house at 100 million Rwandan francs and the bank evaluation sets it at 70 million Rwandan francs, for instance. The bank will therefore not give you a mortgage for a property with a value of 100 million.
Considering this, it is important to make a property valuation before you sign that contract. Depending on the property you are buying, the developer may already have an arrangement with a bank to facilitate clients in getting a mortgage. If you are looking to buy a house in Kigali, we recommend first finding out housing projects that your bank is offering mortgages for.
7. ID or passport
This one is a simple but very important document for purposes of security and identification. While not common, please ensure there are no discrepancies in the name on your ID or passport and the name on other documents. This could also be a date. Crosscheck that every information is consistent throughout your documents.
8. Application letter for a mortgage
Once you have all your documents, you can go ahead and begin the process of applying. for a mortgage. It is very important to consider a professional real estate agency that is familiar with the process of getting a mortgage in Rwanda. This can save you a lot of trouble.
9. Passport photo to attach to the application form
Last but not least, do not forget your passport photo. This last step is one that most people forget. They find themselves at the bank with every other document but this and end up wasting time. The bank has to attach a passport photo on your application so remember to go with 2 copies for precaution.
Vibe House is experienced in the sale of properties in Rwanda and has helped numerous clients in getting mortgages. We have also worked with banks and property developers in Kigali. and Get started and browse houses and apartments for sale in Kigali here. You can also browse plots of land, here, if you are interested in building. We are happy to assist you in buying a property in Kigali. Contact us at info@vibehouse.rw or +250 788 999 273 if you would like more information.
