Economy, Real Estate

Dear Founder,

The national housing deficit in Zambia currently stands at 2.8 million housing units and is projected to double in the next five years. With a population of 57 percent under the age of 35 years old, the future of the housing sector in Zambia is very bright and is one of the most valuable sectors to invest in. As more and more youths obtain employment and start having their own families, there will be an ever-increasing demand for decent and affordable housing.

Chanda Musambachime. Manager Mortgage & Banking Sales ZNBS

There is also a growing middle-class population in the urban areas and this is also projected to grow in the coming years. Land purchases, plot sales, and residential real estate businesses have blossomed as demand for shelter increases and the trend is expected to continue in the coming decades.

Therefore, mortgage products have become more essential than ever before and are a key part of the lives of citizens. The importance of mortgage products can be summarized as follows:

Mortgage makes homeownership affordable and realizable

Owning a house is probably the biggest investment one can make at a personal level. It forms part of the dignity of human living. Buying a house can be particularly expensive, a mortgage bridges this gap by providing an opportunity for individuals for purchase a house at once while spreading the cost of a long period of time. Maximum mortgage tenor varies according to age ranges but can be offered for a maximum tenor of 25 years.

Mortgages are cheaper than any other loan types

Mortgages tend to be cheaper compared to other types of loans like personal or business loans. This is because they are secured. The security is of course the house itself.  If one fails to pay, the house may be sold to repay the loan obtained. Interest rates on mortgages are variable like rates on other loan types, but the fact that this is secured means the degree of variation is not very steep.

Mortgages are a form of investment

Owning a house is also a form of investment. Houses gain value over time and hardly depreciate, unlike other asset classes. The best time to get a house is always yesterday, followed by today as the value of a house is always rising.  As demand for housing stock increases and so will the value of existing houses.

Mortgages provide an opportunity to consolidate debt

Mortgages can be used as a debt consolidation strategy. You can use a mortgage to refinance and pay off all existing and much more expensive loans. Once consolidated, the debt will become less expensive and free up some income to spend on other activities of value.

Mortgages are easy to repay

Mortgages are paid little by little until they are fully paid off. In most instances, the mortgage repayments are even lower than the rent prices. As rental prices go up, mortgage repayments hardly go up in the same margin, in that way it’s very easy to manage the repayments on a mortgage.

Types of Mortgage products offered by Zambia National Building Society

There are quite a number of mortgage players on the market that include Building Societies and Commerical Banks. However, the longest standing and leading mortgage financier is ZNBS.  ZNBS is the market leader in mortgages and offers the following types of mortgages

  • Outright Purchase

A mortgage type that allows you to buy a fully furnished and habitable house of your own liking

  • Construction

This type allows one to build a home/flats of their own design at their own plot or on the land they own.

  • Home improvement

This is a type of mortgage that allows one to improve their own existing home by providing financing for renovations, extensions, or any value-adding amendments to your home

  • Equity release

Allows an individual already owning a house to get value from it in forms of cash. A house pledged as security can have its value released in terms of cash. This allows one to use the funds for other business ventures

  • Balance transfer/Refinancing

This is where a mortgage loan can be used to pay off other loans that one may have.



Yours Sincerely,

Chanda Musambachime

Manager Mortgage and Banking

Zambia National Building Society

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