Mortgage providers in Kenya are digital platforms which provide a broad range of professional services, including mortgages to individuals and corporates, loan consultations and legal advice.
They are offered by banks, building societies and non-bank financial institutions. Let us explore 10 mortgage providers in Kenya.
What is a mortgage?
To put it simply, a mortgage is a long-term loan used to help you buy a house. Financial institutions, including banks, microfinance agencies, SACCOS, and building societies, offer the products.
What you need to get a mortgage loan in Kenya
When getting a mortgage, providers will explain all you need to qualify and be eligible for the loan. Listed below is a mortgage checklist you will need to complete.
- A carefully signed mortgage application form
- Original copies of your identification documents like your ID or Passport
- An introduction letter from your employer (This is for the employed)
- 3 months’ payslip
- 6 months certified bank statement
- Letter of offer or a sales agreement (when you are looking to purchase)
10 mortgage providers in Kenya
Here are some of the top mortgage providers in Kenya, and what they charge as the average annual interest rate. You might want to check them out when looking to buy your dream home.
- Standard chartered bank with 12.2%
- Citibank Kenya has 12.5% as the interest rate
- Commercial Bank of Kenya -12.9%
- KCB Bank -13.3%
- NIC Bank Kenya- 13.4%
- CFC Stanbic Bank Kenya -14.1%
- Barclays Bank of Kenya -14.4%
- Co-operative Bank -14.9%
- Consolidated bank -15.1%
- Housing finance group – 13% (this company has been in this business for more than a decade)
Ownership of mortgage
In the event of a mortgage, they split ownership into two, which are:
- Equity: What you owe as an individual or a business
- Debt: This is what the bank owns
As a result, when you make mortgage payments, you buy more equity and you own the property in the end.
What do mortgage providers consider
Mortgage providers look at a lot of things before taking you through the process. Much like any other loan product (loan app or not), the lender will look at:
- Your credit score
- The home price and the loan amount,
- The down payment,
- The loan term, and
- The loan type
Types of mortgages in Kenya
In Kenya, there are two types of mortgages, they are:
- Fixed-rate mortgage and
- Adjustable rate mortgage
In this type of mortgage, the interest rate is fixed till the whole repayments are done. It is more expensive because the amount remains the same during the lifetime of the loan.
Adjustable rate mortgage
The interest rate in this type of mortgage keeps changing depending on the market structure. The loan repayment keeps reducing. It is the most common type of mortgage operated in Kenya.
The reason for the changes in the interest rate is because they transfer the part of the risk of the loan to the borrower.
Read also all you need to know about the 5c’s of credit.
A mortgage is a loan that enables an individual to buy the house of their dreams. Getting a mortgage is even more rewarding when you can take advantage of competitive interest rates and flexible payment plans.
Mortgage providers in Kenya provide home loans for both commercial and residential properties.