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Cracking the Code: Insider Tips for Navigating Mortgage Market and Housing Financing in Kenya

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Demystifying the Mortgage Market: Essential Strategies for Housing Financing in Kenya, Africa

Securing a home is a significant milestone for individuals and families, representing stability, security, and a sense of accomplishment. In Kenya, where the demand for affordable housing is high, understanding the intricacies of the mortgage market and housing financing options is crucial.

This in-depth article aims to be your trusted companion, providing insider tips and expert advice to help you confidently navigate the mortgage market and housing finance in Kenya. From understanding the fundamentals of mortgages to finding the right mortgage provider and exploring alternative housing financing options, we’ve got it all here.

Understanding Mortgages in Kenya

A mortgage is a long-term loan from a financial institution or provider to finance a residential property's purchase, construction, or renovation. It is a secured loan, meaning the property itself serves as collateral. This gives the lender the right to seize the property if the borrower fails to repay the loan according to the agreed terms.

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In Kenya, you can get your mortgage from any of the following providers: ● Commercial Banks: These well-established financial institutions offer a range of mortgage products and have extensive branch networks, making them accessible to a broad customer base.

● Mortgage Companies: These companies focus exclusively on providing housing finance solutions. They often deeply understand the mortgage market and offer tailored products to suit various borrowers' needs. Some notable mortgage companies operating in Kenya include HF Group, Kenya Mortgage Refinance Company (KMRC), and Zamara Mortgage Financing.

● Savings and Credit Cooperative Organizations (Saccos): Saccos are member-based financial cooperatives offering various financial services, including mortgage financing. Saccos provide an alternative avenue for individuals to access mortgage loans. Notable Saccos in Kenya that offer mortgage products include Stima Sacco, Harambee Sacco, and Kenya Police Sacco.

● Microfinance Institutions (MFIs): These provide housing finance solutions to individuals with lower income levels and limited access to traditional banking services. They focus on financial inclusion and may offer more flexible terms and conditions.

● Cooperative Housing Societies: Cooperative housing societies are formed by groups of individuals with a common goal of homeownership. These societies pool funds from their members and offer housing finance solutions, including mortgages, to their members. An example is the Nyati Housing Co-operative.

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Source: Nation Kenya

Types of Mortgages Available in Kenya

We have the following types in the country:

● Fixed-Rate Mortgages: Fixed-rate mortgages in Kenya offer borrowers a stable interest rate throughout the loan term. The interest rate is set at the time of loan initiation and remains unchanged regardless of fluctuations in market interest rates.

● Adjustable-Rate Mortgages (ARMs): Also known as variable-rate mortgages, these have interest rates that fluctuate over time. The interest rate is usually tied to a benchmark, such as the Central Bank Rate (CBR) or the Kenya Bankers' Reference Rate (KBRR), plus a predetermined margin.

● Joint Mortgages: This type of mortgage is commonly used by spouses or family members who combine their income and resources to qualify for a higher loan amount.

● Guarantor Mortgages: These involve a third party, usually a family member or close associate, who guarantees the loan repayment if the primary borrower defaults.

● Sharia-Compliant Mortgages: Instead of charging interest, Sharia-compliant mortgages utilize alternative mechanisms such as profit-sharing or lease agreements to facilitate home financing.

● Government housing schemes in Kenya: These programs include the Affordable Housing Program under the Kenya Mortgage Refinance Company (KMRC). We also have the Housing Fund initiative, which will be introduced in the 2023-2024 financial year.

Mortgage Market and Housing Financing in Kenya -18 Source: Word Bank

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Guide to Finding the Right Mortgage Provider in Kenya

The right provider is the one that offers competitive rates, favorable terms, excellent customer service, and a smooth application process. Here is a comprehensive guide to help you find the perfect mortgage provider that meets your needs:

1. Research and Compare Mortgage Providers

Conduct thorough research to identify reputable mortgage providers on social media, Google, and through referrals. Consider both banks and specialized mortgage companies. Look for providers with a strong track record, positive customer reviews, and a wide range of mortgage products. Read reviews, seek recommendations from friends or family, and consider the provider's reputation in the market. A responsive and supportive mortgage provider can smooth the application and approval process.

2. Evaluate Mortgage Rates and Terms

Compare the mortgage rates in Kenya from various providers. Look at the loan terms and repayment options different mortgage providers offer. Choose providers that offer competitive rates, flexible repayment options, and favorable loan terms tailored to your financial circumstances.

3. Explore Specialized Mortgage Products and Features

Some mortgage providers offer specialized products and features that cater to specific needs. For example, some may offer mortgage options for self-employed individuals, diaspora borrowers, or those seeking construction loans. Assess whether the provider offers any unique features that align with your requirements.

4. Seek Pre-Approval or Mortgage Prequalification

Obtain pre-approval or prequalification from your shortlisted mortgage providers. This will give you an estimate of the loan amount you can qualify for and demonstrate your seriousness as a borrower. Pre-approval can enhance your negotiation power and simplify the homebuying process.

Mortgage Market and Housing Financing in Kenya -190 Source: Flama Properties

5. Review Terms and Conditions

Thoroughly review the terms and conditions of the mortgage agreement before committing to a specific provider. Pay attention to prepayment penalties, default terms, and other clauses that may affect your ability to repay the loan or sell the property.

Mortgage Market and Housing Financing in Kenya -1090 Source: Mostaloy International

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Top 3 Mortgage and House Financing Providers in Kenya

Below are the best mortgage providers in Kenya, together with details of their offerings:


NCBA is hands down the best mortgage provider in Kenya currently. The bank offers competitive mortgage solutions with an attractive interest rate of 11.9%, reduced from 13%. They provide various mortgage products to cater to different needs:

● Home Loans: NCBA enables the purchase of ready-made homes with up to 105% financing, allowing borrowers to cover additional costs associated with home purchases.

● Plot Loans: Borrowers can purchase plots with up to 70% financing based on the value of the plot.

● NCBA EasyBuild: This unique offering allows stress-free home construction by selecting from various pre-designed houses. Borrowers can enjoy up to 100% financing on the construction cost and professional fees.

● Fixed-Rate Concession: NCBA provides a fixed-rate concession for three years, ensuring stable and predictable mortgage payments.

2. Co-operative Bank

Co-operative Bank provides a 15-year mortgage loan with a competitive interest rate of 9.9%. Their mortgages are de-risked by the Kenya Mortgage Refinance Company, ensuring increased affordability and accessibility for borrowers. In the Nairobi Metropolitan area, the maximum loan amount is capped at Sh6 million; outside the area, borrowers can receive a maximum of Sh5 million.

Mortgage Market and Housing Financing in Kenya -19078 Source: Cooperative Mortgage Bank

3. Standard Chartered Bank Kenya

Standard Chartered Bank Kenya offers a range of mortgage products to suit different needs, including home purchase loans, construction loans, and non-resident mortgages. With competitive interest rates starting at 12.2%, borrowers can access loans of up to 100 million shillings with a maximum repayment period of 25 years. The bank charges a facility fee of 1% of the loan amount, with a minimum of 10,000 shillings. Additional fees include legal costs, stamp duty charges, and insurance fees. Standard Chartered Bank provides comprehensive mortgage solutions and flexible financing options.

4. HF Group

HF Group is a prominent mortgage provider in Kenya, offering various mortgage products such as home, construction, and land purchase loans. The provider has an interest rate of 13% and financing of up to 90% of the property value. HF Group also provides flexible repayment terms. Employed individuals can access a tenor of up to 20 years, while small and medium enterprises (SMEs) and groups have a maximum tenor of 10 years. The fees associated with HF Group mortgages include a commitment fee, valuation fee, legal fees, and stamp duty. HF Group also offers additional benefits like fire insurance, mortgage cushioning in case of death or disability, and tax relief for occupied homes.

5. KCB Bank

Last on our list is KCB Bank. The bank offers a range of mortgage options designed to meet the diverse needs of borrowers. With an interest rate of 13.3%, borrowers can access up to 90% financing for owner-occupied properties, 80% for business premises, and 70% for plot purchases. KCB has flexible repayment periods of up to 25 years for salaried individuals. The mortgage application process incurs internal fees such as appraisal charges and ledger fees, as well as external fees like legal fees, stamp duty, valuation fees, and insurance fees for life and property coverage. KCB Bank is known for its customer-centric approach and convenient mortgage solutions.

6. Equity Bank

This bank offers flexible mortgage solutions with up to 15 years of repayment. The minimum loan amount is KES 2 million, with no maximum loan limit, providing borrowers flexibility based on their financial requirements. Equity Bank offers up to 80% financing depending on the property's location, enabling borrowers to achieve their homeownership goals.

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Here are answers to some of the questions that will come up in the process:

Q: How much is a downpayment on a house in Kenya? Different banks offer competitive options in Kenya. For instance, with NCBA, you do not even need a downpayment. They can do upto 110% financing. With Equity Bank, you need a 20% downpayment, as they will do 80%. In short, you will need 10% to 30% depending on your chosen bank.

Q: Which bank is best for house building loan? NCBA is currently the best bank for house building. They will finance land buying to completion. And their staff are friendly, plus their rates are affordable.

Q: Is it cheaper to build or buy a house in Kenya? The cost of building or buying a house in Kenya depends on several factors, including location, size, design, and materials used. Building a house can provide more flexibility in terms of customization and potentially lower costs compared to buying an already-constructed property.

Q: Is mortgage worth it in Kenya? Yes, it is worth it. Mortgages provide a means to homeownership and offer the opportunity to build equity over time. You only need to raise a small amount, and the bank will finance the rest.

Q: What are the disadvantages of mortgages in Kenya? There are a few downsides to this financing method. They include the obligation to make regular loan payments over an extended period and the potential impact of fluctuating interest rates on monthly payments. There are also associated fees involved in the mortgage application and processing. Lastly, there is the risk of default and potential consequences such as foreclosure if loan repayments are unmet.


Navigating the mortgage market and finding the right housing financing in Kenya can be complex. However, the above information has shed some light on housing financing in Kenya. At Hao Finder, we understand the challenges of finding the right mortgage and housing financing. Our mission is to simplify the process and assist you in finding the best mortgage provider that suits your needs. With our extensive database and comprehensive information, we can help you access the latest rates, products, terms, and packages offered by top mortgage providers in Kenya. Whether you are a first-time homebuyer, looking to build your dream home, or seeking to invest in real estate, Hao Finder is here to guide you. So, what are you waiting for? Contact us today to start your house ownership journey.


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