Mortgage Uptake In Kenya

What Is The Mortgage Uptake In Kenya?

Despite the rapid growth of the real estate sector in Kenya, the mortgage uptake is still low. According to the Kenya Bureau of Statistics Economic Survey, most of the adult population, which accounts for nearly 56%, is now dreaming of homeownership.

However, the uptake of mortgage loans in the building and construction sector reduced from Sh106.3 billion in 2015 to Sh104.8 billion in 2016.

The average new mortgage loan size has been about Sh8 million for the last one year, indicating that the housing finance market is yet to move downstream.

One of the reasons for the low mortgage uptake is the challenges of the undeveloped medium-to-low income housing market or the latent demand in the high-income housing market that is yet to be met.

To address this issue, the Kenyan government has launched the affordable housing initiative, which aims to provide affordable housing to Kenyans.

The Kenya Mortgage Refinance Company (KMRC) is expected to promote the growth of the Kenyan mortgage market with a targeted mortgage account of 50,000 homes within five years.

The lending by KMRC will enable potential home buyers to access affordable mortgages, enabling them to acquire homes.

KCB Bank offers mortgage loans to Kenyans who want to buy or build their dream house, develop property for letting, as well as buying land and plots.

The bank’s mortgage loans are available to salaried persons, self-employed, contract persons, as well as Kenyans working abroad.

Borrowers can access up to KES 500,000 for home purchase or construction and repay in up to 25 years. The bank also offers a top-up of the loan with its Mortgage Plus product.

What Is The Current Mortgage Uptake Rate In Kenya?

There is no specific information on the current mortgage uptake rate in Kenya. However, statistics show that home ownership has remained relatively low at 21.3% in urban areas.

The Kenya Mortgage Refinance Company (KMRC) was established to promote the growth of the Kenyan mortgage market, with a targeted mortgage account of 50,000 homes within five years.

The average new mortgage loan size has been about KES 8 million for the last one year, indicating that the housing finance market is yet to move downstream.

According to the Central Bank of Kenya, the average mortgage lending rate rose to 11.3% in 2021.

What Is The Current Mortgage Lending Rate In Kenya?

As of September 2022, the mortgage lending rate in Kenya is 12.5% APR for Standard Chartered Bank. However, it is important to note that different lenders may offer different rates and terms.

Kenya Mortgage Refinance Company (KMRC) started lending to financial institutions at an annual interest of 5% in September 2020, enabling them to write home loans to 7% for Kenyans earning below Ksh.150,000, borrowing funds of up to Ksh 8 Million.

This is the cheapest mortgage rate in Kenya, but it is not clear if this rate is still available as of September 2022.

KCB Bank offers mortgage loans with the best mortgage rates in Kenya. The mortgage loan enables borrowers to buy or build their dream house, develop property for letting, as well as buying land and plots.

The loan is available to salaried persons, self-employed, contract persons, as well as Kenyans working abroad.

Borrowers can access any amount from Kes 500,000 for home purchase or construction and repay in up to 25 years.

The interest rate for KCB Bank’s mortgage loan is not explicitly stated on their website, but it is likely to be around 13.3% APR based on the information provided.

The Central Bank of Kenya provides historical data on interest rates, including commercial banks’ monthly weighted average lending rates.

However, it is not clear if this data is up-to-date or if it includes the current mortgage lending rates in Kenya.

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