What is a mortgage?

Mortgage is a loan offered by banks and other financial institution to homebuyers. The property is used as collateral for the loan. To get started, most banks will require a down payment of 20% of the value of the property.


Well, most of you may be wondering why ones needs to take a mortgage? An advantage of taking a mortgage is that you own a little piece of the property every time you pay off the mortgage. Conversantly, this is not the case with paying rent. Because, you’ll end up paying millions and when you’ll miss a month’s rent, you’ll be evacuated by the property’s owner.

Taking a mortgage on a property strips the ownership into two: equity, which is what you own, and debt, which is what the bank owns. Therefore, when making a mortgage repayment, you buy more equity and ends up owning the property by the end of the amortization period.

Another advantage of taking a mortgage is that you can trip the value of the property once you have bought it. Let say, for instance, you take a mortgage of 4,000,000 ksh and buy a property.

Say, you find a person who is interested in the property and is willing to pay you 7,000,000 Ksh. If you chose to sell the property at that amount, you will have made a cool 3,000,000ksh. You only require paying the bank what you owe them, and not a cent on the profit you made.

Types of mortgages in Kenya

There are two types of mortgages in Kenya. This classification is based on the rate paid on the loan.

The loan you take on your property can either be:

a) Floating rate mortgage

Also called a variable or adjustable rate mortgage, this type of homeowner’s loans factors in fluctuating rates of the credit market. What this means is that the mortgage rate will go up or down depending on the market.

When the rates in the credit market are high, the mortgage rate of the repayment will be high and vice versa.

Though risky, variable rates are often cheaper compared to fixed rates.

b) Fixed rate mortgage
As the name suggests, the fixed rate does not fluctuate with the credit market. This type of mortgage has a fixed interest rate that runs through the entire term of the loan.

Fixed rate mortgage is considered the safest but are often more expensive compared to variable rate mortgages. In addition, you risk locking yourself in a higher rate in cases where the interest rates are falling.

Types of Mortgage loans

To entice a huge number of borrowers, financial institutions try as much as possible to tailor the mortgage for different clients.

See also: Digital credit: Top 7 Mobile money lending in apps in Kenya

Most banks and other financial institutions are likely to offer the following loans:

a) Owner-occupied residential mortgage. This is for those who wish to live in the property they purchase with the mortgage.

b) Investment residential mortgage. This is for those that purchase the property as an investment and not as their primary residence.

c) Construction loan for those looking to build from the ground The amount is often sent to the contractor are the professionals overseeing the project.

d) To up loans also called Equity loan. This is an easier way of getting extra funds using the equity you have accrued. The loan can be used for other reasons.

Therefore, now that you know all about mortgages, here is what you will need to get started with your dream homes.

For most banks and other financial institutions, you will need the following documents to get a mortgage. Note, however, that the exact documents required may vary from one institution to the other. Check with the lender you prefer just to be sure.

Mortgage checklist:

A signed mortgage application form
Original copies of your identification documents, ID or Passport
An introduction letter from your employer (for those employed)
3 months’ payslip
Certified bank statement for at least 6 months
Letter of offer or a sales agreement (when looking to purchase)
Top mortgage providers in Kenya
Here are some of the top mortgages providers in Kenya, and what they charge as the average annual interest rate.

Here are some of the mortgage institutions in kenya, you might want to check them out when looking to buy or build your dream home.

    Formerly known as Barclays, has got a variant of mortgages to suit the clients needs. Whether you’re a first-time buyer, buying another property, buying to let or wanting to build your own house, with an Absa Home Loan, you can have the home you want. They even offer Shari-ah compliant mortgages.

Absa formerly known as Barclay’s Bank, is one of the reliable financial institutions in Kenya. Their Home loans have an interest of 14%, which is distributed over a time frame decided upon in years. Which cannot exceed 28 years.

You can contact them physically on Absa Head Quarters, Waiyaki Way, PO Box 30120, 00100 GPO, Nairobi, Kenya. Or call Tel: +254 (20) 3900000, Cell: +254 (722) 130120/ +254 (732) 130120 or through Email:absa.kenya@absa.africa

    Choosing the right mortgage plan is a top priority when beginning the journey to home ownership. The option you choose should fit your unique needs and preferences. Well, NIC may just be the right stop for you. They have a dedicated team of Mortgage specialists to walk with you through the journey towards securing your dream home.

NIC offers its clients a variance of home loan that may just suit your specific needs. Some of the deals are;
Equity Release – Financing against your already existing house
Purchase Financing – Loan that funds to buy a readymade house
Top-Up – Increase in value of your existing mortgage due to reduction of loan amount or appreciation of property value
Balance Transfer/Refinance -Transfer of an existing mortgage from one financier to another
Construction Finance – Loan that funds the building of a residential  home or residence
Plot Purchase – Financing to buy vacant land

Furthermore, they’ve got some benefits that helps them stand out of the crowd. For instance, they give up to 90% financing for Kenyan residents and 70% financing for Kenyans in the diaspora, Mortgage Protection Insurance (MPI) cover that takes care of retrenchment, death and disability and social perils cover included, Competitive Interest rates, Flexible repayment periods of up to 20 years, No penalty for early repayment, Joint applications allowed, Minimum amount of KES 1 million. Maximum amount is based on your ability to repay and their Interest is charged on a reducing balance basis.

You can reach out to them physically for a home deal through; NIC House, Masaba Rd. Upperhill., P.O.Box 44599-00100, Nairobi Kenya. Or through Fax: +254 (20) 2888505, Mobile:  +254 (711)041 111/ +254 (732)141 111, Email: contact@ncbagroup.com


Equity group holdings is a household name in the kenyan finance industry, it is one of the banks helping individuals achieve their goals through education and business loans. Well, they are set to see that you have your dream house. Their home loans are relatively affordable and they have a variance of options from building from scratch to helping you complete it. Their loan amount is based on the customer’s ability to pay, with a repayment period of up to 15 years. Equity Bank ensures they give you a 100% financing.

Like most finance institutions giving home loans, the requirements are somehow similar but, I’ll give you the specifics of Equity bank. Yiu will need ;
Three original latest pay slips
2 Copies of the ID & Pin certificate.
An introduction/Appointment/Confirmation letter from the employer.
Duly signed authorization forms.
Dully completed loan application and appraisal form
Valuation report
Title deed

You can reach out to them physically through P.O BOX 75104-00200 NAIROBI or through phone, telephone Number: 0202263000 or email them at info@equitybank.co.ke

    Co-operative bank have an arm which helps them run their mortgage operations called Goodhome.
    Good Home provides affordable mortgages with various features that are tailored to suit your  individual and corporate needs as well as make loan repayments more comfortable. They give up to 90% financing and their repayment period is up to 20 years subject to the product you choose.

Type of mortgage financing available

Acquisition: They’ll help you acquire your first home, whether residential or commercial.
Construction: They can help you build from scratch your dream house.
Equity release; For construction or property purchase purposes. Do you own a house and would like to borrow against it, they will offer you the best solution.
Plot purchase; Need financing to buy that shamba – then they are the right partner.
Plot Buy and Build; The bank offers financing to purchase land and construct the home of your choice.
Renovation; Looking to improve your home features, a renovation mortgage will help you do that.

Eligibility Criteria

Employed Persons
Kenyans in the Diaspora
Joint Applications (Spouses, Parents/Children)
Company (Private Limited)
Small and Medium Enterprises
Co-operatives/Transport, Housing & Investment societies Company
Why a Good Home Mortgage

Goodhome offers a wide array of mortgage product offering i.e. purchase, construction and equity release
Multi-Currency Mortgages available in KES, USD, GBP and EUR
Efficient processing of your application
Higher financing percentages to enable you own your home with ease
Dedicated personal banker to walk you through the process
Flexible and competitive rates
Automatic qualification for a credit card
End to end real estate solutions including project financing and end buyer financing

You can reach them through
Tel: +254 711 049 696, +254 711 049 739,
+254 711 049 266 or email: goodhome@co-opbank.co.ke. You can reach co-operative contact center directly also through;
Tel: +254 020 2776000, +254 703 027 000,
Email: customerservice@co-opbank.co.ke

  1. Standard Chartered

Do you want to open the door to your dream, well, standard chartered got you covered. Its one of the outstanding financial institutions in Kenya. Their home loan is also attractive, they can loan upto 100 million which can be refundable in a tenor of 25 years.

They offer a variety of home loans, from building from scratch, purchasing a new property, buying land or completing your dream home. They also got lots of in house services to aid you in acquiring the loan thus reducing the struggle for you. Well, who doesn’t fancy free premium services.

Standard chartered like any other financial institution have their set of requirements before they loan you. Some of those requirements are;

Completed and signed application form
Certified copies of last 3 pay slips
Certified letter from employer stating terms of employment
Certified copy of ID / passport
Copy of PIN certificate
Sale agreement
Documentary evidence of any other income
Certified copies of bank statements for 12 months (for non-Standard Chartered customers)
3 colour passport-sized photos (for non-Standard Chartered customers)
Copy of title deed
For a Mortgage Transfer, Mortgage statement for the last 6 months
Requirements may be more or vary for Kenyans residing out of the country

You can reach out to them physically on Client Contact Centre, Standard Chartered@Chiromo,
Level 4, 48 Westland’s Road. P.O.Box 30003-00100 Nairobi, Kenya. Or through cell on +254 20 329 3900, +254 703 093 900 or E-mail: Ke.Service@sc.com


Consolidated bank like many other financial institutions, has you and me (their clients at heart). They understand our need to achieve better things for our family, and that’s where their home loan comes in handy.
This is a product designed to service the needs of customers who may wish to own or build their home. They can help in;

Purchasing or constructing a residential or commercial property
Purchasing a plot
Equity release
Project finance

Like other financial institutions, they have a set of requirements before giving you the loan. So you need to get acquainted with them to avoid last minute pressure. Here are their requirements;

Proper documentary identification (Identity Card or Passport).
One (1) recent colored passport size photo. (To be provided or taken at the branch)
Introductory letter from the employer/ an account holder.
KRA pin
Next of kin details
Requirements: Self Employed Persons
Bank statements for the last 6 months
Business registration certificate
Cash flow projections
Copy of the latest annual filing returns and receipts
A brief history of the business and nature of the business
Audited accounts for a period of 3 years
KRA pin
Next of kin details

You can reach Consolidated bank  on Consolidated Bank House, 23 Koinange Street.
P. O. Box 51133 – 00200, Nairobi. Or through Cell: Head Office/switch: +254 703 016 000 or Email:tellus@consolidated-bank.com


Now that you are in the know of how mortgages operate in Kenya, set a plan and go for any of the listed financial institutions above. Come to terms with them and build or purchase your dream house.

I admit that there may be other financial institutions out their giving out mortgages, but these are the best and most reliable within Kenya, serving both residents and non residents, with most of them offering up to 100% financing. So come on, let’s build our palatial homes.

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