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Saving for a deposit

Nobody bought a house empty-handed. Even if you qualify for our 100% home mortgage, you still need to have funds on hand to settle the closing fees - You can either have a no deposit home mortgage or no closing cost mortgage, but never the two together with us. Even if you're lucky to get a no deposit mortgage and a no closing cost mortgage with another mortgage provider in Ghana (there's currently providing that in the country), you would still need to have some savings before buying a house.

Here’s what you need to know about getting your first mortgage, whether your plans are imminent or a few years down the line - it never hurts to be prepared, after all.

 

GETTING STARTED

Saving your deposit is the smartest way possible to get mortgage ready, and not mere talk. At DCANS Mortgage, we insist on showing us a minimum bank or investment account from a regulated institution statement balance of GHS10,000 (not meant to be paid to us upfront) before any discussion and/or process can be started - the bigger the better. There are so many ways you can deploy this primary savings to:

Down-payment if you're not on a 100% home mortgage and/or to reduce your monthly repayments, 

Closing costs to settle search fees, legal costs, etc

• Moving and post-moving costs.

 

For most people, the five-figure deposit is the first and largest hurdle on the way to home-ownership. If you’re saving for your deposit yourself, you’ll probably be channelling a fair bit of your income into savings, but it’s worth checking to make sure that you’re maximising your money. House prices have soared but salaries have not grown proportionally. Following the 2008 global financial crises, getting a mortgage became more difficult for many, with zero-deposit and interest-only mortgages becoming more or less a thing of the past - not just Ghana.

This means that, for any person wanting to buy a house today, there are two main focuses: saving the deposit and getting mortgage-ready.

 

REALISTIC TIME-FRAME

Getting your time-frame right is important. You could end up frustrated and disappointed if you rush yourself, but a time-frame that is too long can start to feel abstract and unachievable, too. Take stock of any current savings or assets, look at the type of property you would hope to be able to be able to buy – again, being realistic is a good idea here – and work out how much you will need to save for the level of deposit that you want, usually 10%.

With the maximum borrowing capacity with us being eight times your net annual salary (income multiple rule), you may use it as a guide. Then, take a look at your budget and work out how long it’s likely to take you. You might want to play out a few scenarios, especially if you’re anticipating a pay increase, or if you want to see how plans like family needs or other big expenditures will affect your progress.

 

SET EARLY SAVINGS HABITS

Even if you’re very early in your career and perhaps earning a lower salary as you gain experience, there are things that you can do to maximise your chances of home ownership in the not-too-distant future. Putting saving habits in place, even if you don’t have a lot of extra income to save, will stand you in really good stead for when you are able to save more.

Because the habit is already in place, all you need to do is increase the amount when you can, and you’ll quickly build a decent savings (investment) pot. DCANS Mortgage, like any other mortgage lender also love to see regular, well-establishing saving habits, as it shows them that you’re conscious about your money.

 

WHERE TO PUT YOUR HOUSE DEPOSIT

DCANS Mortgage is not a bank or deposit-taking, so you obviously cannot keep your house deposit or investments with us.

As you may be aware, interest rates on savings are generally dismal right now (<5% p.a.), and there’s no indication that they will improve in any meaningful way any time soon. The difference between some of the highest interest-paying savings accounts and the lowest is fairly negligible, so it’s not really worth stressing about which one to choose, but there are other ways to grow your money into a decent house deposit.

 

1. Treasury Bills

The safest investment vehicle in Ghana today, not your bank's investment products that may even have a few basis points above the GoG T-bill rates.

 

2. My Own Pension (MOP)

My Own Pension is a tier-three pension scheme (operated by the NPRA-regulated United Pension Trustees on the MTN Mobile Money Platform) that provides pension benefits that will ensure retirement income security for every worker, whether in the formal or informal sector.

The affordability and flexibility it comes with enables everyone to enrol and plan for the future regardless of the job you do. You can make contributions on a daily, weekly or monthly basis depending on your income level. Another good thing is that you can also make voluntary contributions to add up to your regular contributions.

In addition to being a pension scheme, it also has a savings component that can be accessed to meet pressing needs after a period of signing up.

How to register

• Dial *170#

• Select option 5 – financial Services

• Select option 4 – Pension & Investments

• Select option 1 – My Own Pension

• Select option 1 to Register

• Follow the prompts to proceed

 

 

3. SSNIT Informal Sector Pension Scheme

Not restricted to informal sector workers. You can walk into any SSNIT office with a minimum of GHS10 and a passport photograph and setup one in few minutes.

 

ACCOUNTABILITY IS KEY

With big, longer-term goals like saving the tens of thousands of Ghana Cedis that you will often need for your deposit, it can be easy to lose focus or motivation when things don’t seem to be happening quick enough. Try to create ways to hold yourself accountable, and to stay connected with your goal of home ownership and this could be finding an accountability buddy - perhaps someone with a similar goal to you, so that you can encourage each other.

 

STAYING THE COURSE

Buying your first home is exciting, and it should be something you really enjoy and appreciate - not least because of all of the hard work you’ll have put in by the time you pick up your keys. Just keep your eyes on the prize, and you’ll get there.


 

Related Pages

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Why Choose Us

How We Compare

MORTGAGES ARE SECURED AGAINST YOUR PROPERTY. YOUR HOME (OR COMMERCIAL PROPERTY) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBTS SECURED ON IT - REPAYMENT ASSISTANCE PROGRAMME AVAILABLE FOR QUALIFIED CUSTOMERS. ALL APPLICATIONS ARE SUBJECT TO STATUS AND OUR LENDING CRITERIA - THIS MEANS THAT THE AMOUNT WE WILL LEND YOU WILL DEPEND ON YOUR INDIVIDUAL CIRCUMSTANCES, THE TYPE OF PROPERTY AND THE AMOUNT YOU BORROW.

We are Non-Deposit Taking No Upfront Fee Direct Lenders (not brokers). Using this digital-first platform constitutes acceptance of the terms, conditions and rules that govern our operations, so if you disagree with any of them in part or in whole, please don't use our services. All loanable funds are private patient capital from dedicated sustainable and reliable sources and not sourced funds from the general public. We're Fully-Compliant: Our home mortgages are structured as Seller-Financed Mortgages (SFM), or International Mortgages or Rent-to-Buy Mortgages, which do not require Bank of Ghana (BoG) regulation. Commercial Mortgages are also not regulated by the BoG. Prospective mortgage applicants are not restricted to buy a home from our internal partners DCANS Properties or Rent to Buy Ghana or any of our in-house home providers.

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