Tanzania’s mortgage market is growing fast as more banks enter the space, creating healthy competition. However, high interest rates and a shortage of affordable homes are still major challenges for ordinary Tanzanians hoping to become homeowners.
According to the Bank of Tanzania’s Mortgage Market Update released on July 24, the number of financial institutions offering mortgage loans has increased from just 3 in 2009 to more than 30 by the first quarter of 2025. Despite this progress, only five banks control 62% of the market, CRDB Bank Plc – 31.99%, NMB Bank – 10.95%, Azania Bank – 8.34%, Stanbic Bank – 5.46% and first Housing Finance Company Ltd – 5.30%.
Tanzania needs an estimated 200,000 new housing units per year, yet the country faces a backlog of about 3 million units. This has pushed many citizens to seek mortgages, but the journey remains tough.
Although the average mortgage interest rate has dropped from about 22% in 2010 to between 13% and 19% today, it is still too high for many. Most Tanzanians, especially low-income earners, cannot afford these loans.
The repayment period has improved—from a maximum of 7 years to now up to 25 years, giving borrowers more time to pay. But even with this improvement, the number of active mortgage accounts is still low—just 5,740 nationwide as of March 31, 2025.
Mortgage value: TZS 683.03 billion (\$256 million) as of Q1 2025, Average loan size: TZS 118.66 million (\$44,438) and Mortgage-to-GDP ratio: 0.42% (Q1 2025).
Despite more players in the sector,access remains limited due to, High interest rates, Lack of affordable housing, Shortage of mortgage products for self-construction, Delays in issuing land titles, High cost of building materials and Overdependence on foreign labor for construction
A key solution introduced by the government is the Housing Microfinance Fund (HMFF), which provides long-term loans to those who can’t access regular mortgage financing. These loans support home construction and improvements for low-income earners.
Dr.Theobald Francis Kipilimba from Ruaha Catholic University recommends that the government, Stabilize lending interest rates, Streamline land acquisition, Invest in training local professionals to cut construction costs and Support more affordable housing initiatives.
The Tanzania Mortgage Refinance Company (TMRC), created in 2010, plays a key role by providing long-term funding to banks and lenders. As of March 2025, TMRC had issued TZS 162.7 billion (\$60.93 million) in loans to 17 mortgage lenders, accounting for 24% of total outstanding mortgage debt.
Some of the 30+ institutions offering mortgages in Tanzania include, CRDB Bank Plc, NMB Bank Plc, Azania Bank Plc, Stanbic Bank Tanzania Ltd, First Housing Finance Company Ltd, Exim Bank Tanzania, TCB Bank, Equity Bank Tanzania, Diamond Trust Bank, NCBA Bank, Standard Chartered Bank, Bank of Africa Tanzania and others.
Tanzania’s mortgage industry has made impressive progress over the past 14 years, with more banks and longer repayment periods. However, if homeownership is to be within reach for the average Tanzanian, the government and private sector must address the critical issues of affordability, accessibility, and infrastructure development.
