Installment Plans vs Mortgages: What Actually Costs Less?
By Funmi Bakare
We ran the numbers on a ₦92M home across both routes. The results surprised even our finance team.
Two buyers want the same ₦92,000,000 home. One uses a developer installment plan; the other takes a mortgage. Which pays less over the life of the purchase? We modelled both.
The installment route
With a developer plan spread over 36 months and interest-free within tenure, the buyer pays the home's price and nothing more in finance charges. The trade-off is a shorter horizon and larger monthly outlays than a long mortgage — but no interest, and no bank in the middle.
The mortgage route
A mortgage spreads cost over 10–20 years, lowering the monthly figure considerably. But at prevailing Nigerian rates, total interest paid can rival or exceed the original price. The lower monthly payment is real comfort; the lifetime cost is materially higher.
So which wins?
If you can sustain the monthly figure, an interest-free installment plan is almost always cheaper in total. A mortgage wins on affordability per month and on freeing capital for other investments. The right answer depends on your cash flow and your appetite to deploy capital elsewhere.
Our advisers will model both against your real numbers — and the portal keeps every payment transparent, whichever route you choose.
Written by
Funmi Bakare
Living Architecture Limited
