Ghanaians Can Use Their Pension Contributions to Help Buy a House: How It Works
- Ghanaian workers contributing towards their pensions can use certain accumulated benefits to support the purchase of residential properties
- The National Pensions Regulatory Authority has explained how Tier 2 and Tier 3 pension benefits can help contributors secure mortgages
- Some financial institutions offer pension-backed mortgages, allowing qualified applicants to purchase houses without paying the entire cost upfront
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Many Ghanaians who dream of owning a house may not know that their pension contributions can help them secure financing to purchase a residential property.
Source: UGC
Under Ghana's National Pensions Act, 2008 (Act 766), workers contributing to approved pension schemes can use certain accumulated benefits to support mortgage applications.
The arrangement allows qualifying contributors to use their retirement savings as security for housing loans instead of relying entirely on personal savings.
The National Pensions Regulatory Authority (NPRA) has previously encouraged workers to take advantage of this provision to become homeowners.
In September 2022, the authority's then Deputy Chief Executive Officer, David Tetteh-Amey Abbey, explained that the law provides opportunities for workers to secure mortgages while still actively employed.
How pension contributions can help buy a house
The arrangement covers benefits accumulated under Ghana's Tier 2 and Tier 3 pension schemes, although the rules differ.
Tier 2 pension contributions: Workers can use their accrued benefits as security for a mortgage to purchase their primary residence.
However, they cannot simply withdraw the money before retirement to buy a house.
Tier 3 pension contributions: Contributors may use qualifying benefits to secure a mortgage, make a down payment or reduce an existing mortgage balance.
The NPRA explains that qualifying Tier 3 withdrawals used for a primary-residence mortgage can receive tax exemptions under the law.
One financial institution offering this arrangement is Republic Bank Ghana.
The bank's pension-backed mortgage programme targets income earners who have contributed to a Tier 3 pension scheme for at least two years.
Qualified applicants may receive financing covering up to 100 per cent of a property's purchase price, with repayment periods of up to 20 years.
Requirements and how to apply
Interested contributors can begin by contacting their pension trustees to confirm their accumulated benefits and whether their schemes support mortgage financing.
They can then approach a participating financial institution to assess their eligibility.
Applicants may be required to provide:
- A valid Ghana Card or accepted identification.
- Proof of employment or regular income.
- Recent payslips or bank statements.
- Details of their Tier 2 or Tier 3 pension contributions.
- Documents covering the property they intend to purchase.
- A completed mortgage application form.
The lender will assess the applicant's income, pension benefits, creditworthiness and ability to repay.
Applicants should understand that pension-backed mortgages are loans, not free houses or automatic withdrawals from their retirement savings.
Approval remains subject to the financial institution's requirements and the applicable pension scheme rules.
Government houses Ghanaians can buy in instalments
Earlier, YEN.com.gh reported that Ghanaians interested in owning a house can apply to purchase properties developed by the State Housing Company.
Applicants must provide identification documents, passport photographs, and pay a non-refundable processing fee of GH₵1,000.
The company offers outright payments, instalment arrangements and mortgage financing through partner banks.
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Source: YEN.com.gh
