Compare the multi-year cost of renting against buying a home with a mortgage.
Cheaper option
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Net cost of buying
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Net cost of renting
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The real question this tool answers
Renting feels like throwing money away, and buying feels like building something. Neither instinct is reliable in Nigeria, where mortgage rates can sit near 28 percent and property can appreciate fast at the same time. This calculator nets out the full cash story on both sides over a horizon you choose, so the decision rests on numbers rather than gut feel. The buying side counts your deposit, the stamp duty on the assignment, and every naira of mortgage interest, then gives you back the equity you build and the appreciation the home earns. The renting side adds up your rent year by year as it grows, minus the rent relief you can deduct each year.
The headline output is the cheaper option and the gap between the two paths. Crucially, the buy figure is a net cost, so it can be small or even negative when appreciation and equity outweigh the interest you pay.
How the buying side is built
The mortgage is amortised month by month, splitting each payment into interest and principal. The interest is a true cost. The principal is not, because it converts into equity you still own, so it is handed back in the equity line alongside your original deposit. Stamp duty on the deed of assignment is added at the rate this calculator applies, which is 1.5 percent of the price, though property charges vary by state. Appreciation is compounded on the full purchase price across the horizon and credited as a gain.
An NGN 80 million home against NGN 6 million rent, over ten years
Take the loaded defaults: an NGN 80 million home with an NGN 16 million deposit, a 28 percent mortgage over 20 years, current rent of NGN 6 million growing 10 percent a year, appreciation of 8 percent a year, compared over 10 years. The monthly repayment works out near NGN 1.5 million. Over the first ten years you pay roughly NGN 176.1 million in interest but repay only about NGN 3.8 million of principal, which is normal early in a high-rate loan. Add the NGN 1.2 million stamp duty. Against that, the home appreciates by about NGN 92.7 million and you hold roughly NGN 19.8 million of equity (deposit plus principal repaid). Net those out and buying costs about NGN 80.8 million. The growing rent, after relief each year, totals about NGN 90.6 million. Buying wins by about NGN 9.8 million.
| Line item | Amount (10 years) |
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The limitation you must keep in mind
This model adds nominal naira across the years and does not discount future cash to today's value. It also counts appreciation as a straight offset without charging you for the opportunity cost of locking NGN 16 million into a deposit that might otherwise earn interest. In a high-rate economy that opportunity cost is real, so the buy figure flatters ownership a little. The result is best read as a directional comparison of total cash, not a present-value verdict. Shorten the horizon and renting often wins, because early mortgage payments are almost all interest and appreciation has had little time to compound. Lengthen it and buying tends to pull ahead as equity and appreciation accumulate. Slide the years box to find your own crossover point.
Why does buying look cheaper despite paying NGN 176 million in interest?
Because the model credits back appreciation of about NGN 92.7 million and equity of about NGN 19.8 million, which together more than cover the interest at these inputs. Drop the appreciation rate toward zero and the verdict flips to renting fast, since the interest no longer has a large gain to offset it. Appreciation is the single most powerful lever on this page, and also the least certain, so test a pessimistic figure before you commit.
Does the comparison include maintenance, service charge, or insurance?
No. It focuses on the financing structure: deposit, interest, stamp duty, equity, appreciation, and rent net of relief. Ongoing ownership costs such as service charges, repairs, and the Land Use Charge are real and would nudge the buy side higher, so treat the buy figure as a financing floor. Confirm any property-related tax with your state internal revenue service, as recurring property charges are set at state and local level rather than nationally.
Is the 28 percent mortgage rate realistic for Nigeria?
It reflects the kind of commercial mortgage rate seen when the Central Bank's policy rate is high. Subsidised products through the National Housing Fund can be considerably cheaper for those who qualify, which would shrink the interest line and improve the buy case. The rate box is yours to change, and the broader tax and lending rules are still shifting after the 2025 reform, so check the current position with the Federal Inland Revenue Service, reconstituted as the Nigeria Revenue Service, and your lender.