Mortgage Refinance Institutions Act: What It May Change

What is a mortgage refinance institution?

A mortgage refinance institution (MRI) is a company licensed to give banks long-term funds against the mortgages those banks have already made. Banks today fund mortgages mostly from short-term deposits, so they cannot easily lend for 20 or 25 years. The Bank of Uganda calls this a mismatch between short-term deposits and the long-term funds that mortgages need.

The idea, in the Bank of Uganda's words, is that an MRI refinances the mortgage portfolios held by banks and other lenders. With that long-term liquidity, banks can extend repayment periods, offer more competitive interest rates and introduce grace periods. The Act also promotes standard mortgage documents, which is a step towards a secondary mortgage market. An MRI does not give you a loan. It lends to banks, not to individuals. For how mortgages work today, see Mortgages in Uganda: Banks, Rates and Deposits.

When did the Act pass, and who regulates it?

The Bank of Uganda says the Mortgage Refinance Institutions Act was passed by Parliament on 4 September 2025. We could not verify the date of presidential assent or the date it came into force, so we state only the date of passage that the Bank of Uganda gave. Treat other dates you see in circulation as unverified until they appear in the Gazette or an official notice.

The Bank of Uganda describes more than six years of study behind the Act, starting from a World Bank-supported feasibility study in 2017, with consultations from 2018 to 2023. The detail is in the Bank's reply to a newspaper critic in the Daily Monitor.

What are the expected effects?

The Bank of Uganda describes the path as a sequence:

1. Set up a well-capitalised refinance company regulated by the Bank of Uganda.
2. Give mortgage lenders liquidity through refinancing.
3. Raise funds in the capital market through corporate bonds and medium-term notes.
4. Once mortgage portfolios are large and standard enough, explore mortgage-backed securities. The Bank says this is a future possibility, not an immediate step.

The hoped-for result for a borrower is longer terms, lower rates and grace periods. Nothing in the Bank's statement fixes a rate or a date. A commentary in The Independent in August 2026 put mortgage debt at about 1% of GDP and said that high interest rates, short-term funding and land titling constraints are the barriers to mortgage lending. It also notes the Ministry of Finance estimates a housing deficit of 2.4 million units. Those numbers show how much room there is to grow, not that the Act has already worked.

What stays unchanged until refinance institutions actually operate?

Almost everything you meet as a buyer. As of November 2026 we found no report that a refinance institution has been licensed or has started to operate, and the Bank of Uganda's own plan puts that step first. Until then:

• Your bank still sets your rate. Banks charged an average 18.73% on shilling loans in February 2026, and a housing finance profile quotes 16% to 22%.
• The deposit is still the bank's rule. Housing Finance Bank lends up to 70% of value, according to its diaspora FAQ.
• The paperwork is the same. See Documents a Ugandan Bank Wants for a Mortgage for the list.
• The title still has to be clean. Read Using a Land Title as Loan Security for what banks check.

The policy rate also moved the other way. On 14 October 2026 the Bank of Uganda raised the Central Bank Rate from 9.75% to 12%, because of the shilling and fuel prices. That makes cheaper loans less likely in the near term, whatever the Act promises later.

Will mortgage rates fall because of the Act?

Not by itself, and not soon on the evidence we have. Rates depend on a bank's cost of funds, the policy rate, risk and competition. The Act can lower the cost of long-term funds, but only after an MRI is licensed, raises capital and refinances loans. Those steps have not been reported. The Bank of Uganda itself says its aim is to enable "more competitive" rates and longer terms, not to promise a number.

What can you do now? Use the Mortgage Calculator for Uganda (UGX) to test a loan at today's rates, and check how much mortgage can I afford. If a seller or agent says the Act will cut your rate this year, ask for the licence number of the institution they mean, because we found none. You can browse plot listings or ask our team on WhatsApp or by email if you want to talk through your options.

What should I watch for next?

Watch for five things: the Gazette notice of the Act, Bank of Uganda regulations for MRIs, the first licence, the first bank to say it has refinanced mortgages, and a published change in a bank's tariff or term. Until at least one of those happens, nothing about your mortgage has changed because of the Act. We will update this page when we can verify one. Related background is on our Property Costs, Taxes and Mortgages in Uganda page.

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Live from Land & Property on 4 November 2026. Prices are the sellers' asking prices.

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Frequently asked questions

Related guides

• Mortgages in Uganda: Banks, Rates and Deposits
• Documents a Ugandan Bank Wants for a Mortgage
• Mortgage Calculator for Uganda (UGX)
• Using a Land Title as Loan Security: What Banks Require
• How Big a Mortgage Can I Afford?
• Property Costs, Taxes and Mortgages in Uganda