Top 10 Mortgage Providers in Kenya to Consider When Buying a Property

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Mortgage Providers in Kenya | Houses for Sale in Nairobi

As it is everyone’s dream to own property; due to the living security and an opportunity to build equity it comes with, we should not factor out the due diligence that is necessary. It is very important for you as a buyer to understand the type of mortgage you want and if you possibly qualify for it.

Since not everyone is financially able to make the bulk cash payments, getting a loan or a mortgage is the next best option. But first, let us understand the term Mortgage.

What is a Mortgage?

A Mortgage is a legal agreement by which a bank or building society lends money at an interest in exchange of taking the title of the debtor’s property with condition that the transference of the title becomes void upon the payment of the debt.

In simple terms, it is a type of loan you can use to purchase a property.

Types of Mortgages in Kenya.

Kenya offers two types of Mortgages. Namely;

  • Fixed rate mortgage
  • Variable or Adjustable rate mortgage
  1. Fixed –rate Mortgage

This type of Mortgage provides borrowers with a fixed interest rate, already standard rate over a specific period of time between 15, 20 or 30 years. This translates to; the shorter the term, the higher the monthly payments. Also the longer the period the borrower takes to repay the loan, the more interest is charged on it.

  1. Variable-rate Mortgage

This type of mortgage is bound to changes during the life of the loan due to factors affecting such market fluctuations. The principle of demand and supply. Payment rates change overtime to adjust the new changes.  An example is; if the loan takes 10years, the rates can be reviewed every 3years for the 10years.

Who are the Mortgage qualifiers in Kenya?

For a person to qualify for a mortgage in Kenya, they need a certifiable income with the below:

  • 6 months certified bank statement
  • 3 months’ pays lip and tax returns
  • Original ID or passport
  • KRA pin
  • Letter of induction from your employer
  • A down payment determined by the terms of the lender.

Types of loans offered by Financial Institutions:

Banks are nowadays in the business of custom making mortgages to fit each clients need with the aim of attracting more borrowers. Below is what they are likely to offer:

  • Construction Loan

Meant for those building their homes from scratch hence the amount is sent to the contractors and the professionals supervising the project.

  • Investment Residential mortgage

This is meant to be a property investment and not the main residence.

  • Owner-occupied Residential mortgage

This is for those who intend to build and live in the property they have purchased.

  • Equity loan

This is a good way of getting extra resources with the equity you have accumulated. The loan can be cast-off for other causes.

Below are top 10 mortgage providers in Kenya and what they charge as their average annual interest rates. Note that; the rates may vary and are just approximations.

  1. Housing finance group
  2. Standard chartered bank 12.2%
  3. Citibank Kenya 12.5%
  4. Commercial Bank of Kenya 12.9%
  5. KCB Bank 13.3%
  6. NIC Bank Kenya 13.4%
  7. CFC Stanbic bank Kenya 14.1%
  8. Barclays Bank of Kenya 14.4%
  9. Co-operative Bank 14.9%
  10. Consolidated bank 15.1%

If you are wondering if owning a home in Kenya is hard read about the mortgage providers and their rates. The house prices in Kenya is also another area to consider when making a decision to invest. Denver Real Estate is among the property companies in Kenya that provides you with genuine prime plots with ready Title Deeds. Call/Whatsap us; 0701 730 267.