Mortgage Consumption and Performance of Mortgage Financing in Uganda

The study examines mortgage financing as a process of giving loans under specific mortgage terms such as interest rate, repayment period and the loan amount to acquire real estate property. The mortgage terms and consumer knowledge, a multidimensional construct, influence the consumers’ choices, decision process and create real demand preferences that guide investments in real estate. This led Ugandan to adopt key policy strides in the recent years that focused on achieving favourable mortgage terms and enhancing consumer knowledge to increase the performance of mortgage financing measured as growth in portfolio, number of home owners and more investment. Despite these measures, the performance of the mortgage financing was 0.5% far below the targeted 5%, prompting this study to include attitude as a variable, which is a psychological phenomenon of evaluating situations and influencing choices. We used a cross-sectional survey approach and a sample of 196 and collect data using a self-administered questionnaire to managers of mortgage and brokerage firms. The sample was selected on the basis that they were in the best position to evaluate household consumer knowledge given their level of interaction with them. This study used quantitative method such as correlation analysis and multiple regressions to test the hypotheses. The result shows that attitude to mortgage financing was the most important predictor of performance of mortgage financing while consumer knowledge and mortgage terms were found to be moderate. Our findings are significant as they reveal that incorporating household attitude variable positively influence the household demand which subsequently enhances mortgage financing and leads to more investment in the real estate.