BANK OF AFRICA LOWERS INTEREST RATES ON HOME LOANS

In a bid to facilitate many Tanzanians to own houses, Bank of Africa Tanzania Limited (BOA) has reduced its interest rates on home loans from 18% to 16% per annum. However, this offer is only valid for 6 months.

A Senior Marketing Officer with the bank, Solomon Haule told journalists in Dar es Salaam recently that the offer seeks to help many more people to access home loans from BOA and ultimately own houses. "The offer will last for 6 months" said Haule. The bank has also increased the repayment period from from 15 to 20 years. Haule further mentioned that in order for one to be eligible for a home loan from BOA, he/she should have a monthly salary of TZS 1.4 million or married couples with a combined monthly salary of TZS 2 million.

Haule mentioned that a home loans from BOA can assist a people to buy low cost houses being built by various institutions such as National Housing Corporation (NHC), National Social Security Fund (NSSF) and Parastatal Sector Pension Fund (PSPF). "People can also buy houses from individuals", said Haule.


Bank of Africa began operations over 30 years ago in Bamako, Mali. The Group currently maintains an asset size of over 3.85 billion Euros.

In Tanzania, the bank has been doing business for 8 years, serving the Corporate and SME sectors. Currently, the bank has branches in Dar es Salaam (10 branches), Arusha, Kilimanjaro, Morogoro, Mbeya, Tunduma, Mwanza, Kahama and Mtwara.

Below is some detailed information about mortgage loans from Bank of Africa;

Home Finance
This is primarily a long term facility designed to enable one acquire structured loans that will help one own, improve, complete or release equity investments on his/her new/existing home via:

Home Purchase Loan

• Designed to assist a customer purchase residential properties for his/her own use, 

      for rental purposes, for his/her employees or for other purposes

• The loan shall not exceed 90% loan to value (LTV) ratio

• The maximum term for this facility is 20 years for both TZS and FCY applications or your 

      residual working; life whichever is less

• Joint applications between spouses, parent/child, as well as siblings are also encouraged

Home Equity Loan

• If one has already invested in residential properties, this loan will enable him/her release 

      his/her investments in those properties to improve his/her liquidity position

• Existing homeowners with properties that are already paid for or still being financed can 

      apply for this facility

• The loan shall cover up to 70% of the forced sale value (FSV) of the property

• The maximum term for this facility is 10 years for both TZS and USD applications

Home Improvement Loan

• If one has already invested in residential properties, this loan will enable him/her release 

     his/her investments in those properties to improve his/her liquidity position

• Designed to assist one undertake renovation and/or extension works on his/her existing 

      houses. Existing homeowners and companies that need improvements done on their 

•   properties can apply
• 
  
• Loans shall not exceed 40% of the current value of the existing property

• The maximum term for this facility is 10 years

• Home Completion applications shall also be considered in this category but 70% of the 

      property must have been already completed

• Applicants will be required to secure the loan with the property being improved upon. 

     Loan shall be disbursed per certificate so as to ensure completion of the project. 

     Approved Loan will be based on bill of quantities provided by a BOA approved Consultant

Benefits

• Wealth creation through home ownership

• Property appreciation in value

• Affordable mortgage repayment

• Easy flexible instalment payments that will fit customers’ cash flow

• Flexible payment periods

• No additional security required (other than the minimum 10 - 20% margin and the 

      property itself

Eligibility

• Borrowers must be Tanzanians /foreigners with Tanzanian spouses or children

• Borrowers must be between 21 and 50 years of age where by the tenor does not exceed 

      the retirement age (retirement age is 60 years)

• Exceptions will be considered for professionals, joint borrowers or individuals earning 

      verifiable passive income

• Borrowers must have verifiable employment and income

Target market

• Salaried employees

• Individual entrepreneurs and professionals

• For existing and prospective BANK OF AFRICA - TANZANIA customers (subject to Bank 

      account statements for the last 12 months from the applicant’s current bank)

Collateral arrangement

• Minimum 10% deposit (compulsory)

• Acquired property

• Insurance policy (property and life) to be filed citing the bank’s interest (to be paid directly 

      by the bank)

Pricing

• Minimum loan – TZS 40 million / USD 40,000

• Minimum down payment – 10%

• Maximum term – 20 years