Top Kenyan Banks With Surprisingly Affordable Mortgage Bank Rates

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Mortgage bank rates similar to bank savings rates are usually critical determinants when searching for a reliable banking partner whereby the lower the fee charges, the more cost friendly a bank is regarded to be and vice versa.

Likewise in matters regarding home ownership, various banks offer a portfolio of mortgage products intended for different purposes at varying financing terms and rates.

Below are some of the ways to qualify for a mortgage and choose the best mortgage lenders in Kenya.

How To Qualify For Mortgage In Kenya

Despite the various benefits associated with mortgage loans, getting approved for one in Kenya can be easier said than done if you do not meet the eligibility requirements which include;

i. Possess national ID card
ii. Possess KRA PIN certificate
iii. Be in active employment by providing an employment letter
iv. Possess an account with the lender and channel salary through it.
v. Possess the required minimum net salary amount
vi. Possess a reliable and steady income source by providing proof of payslips or bank statements.
vii. Provide form of collateral/security e.g property title deed

Advantages Of Mortgages

i. Cost effective– mortgage loan interest rates tend to typically be lower than conventional loans since the majority of mortgage loan lenders attach the property as collateral/security to the loan.

ii. Ease Of Payment– Due to the long repayment tenures of mortgage loans, borrowers are able to sustainably commit to the monthly installments without financial strains.

iii. Tax Benefits- through mortgage reliefs, a borrower is entitled to an annual interest deduction of Ksh300,000 of interest paid to a registered mortgage lender.

iv. Affordable- Despite the ‘intimidating’ prices of most properties, mortgage loans enable borrowers to acquire properties that were once perceived to be out of reach due to financial constraints.

v. Form of Investment- Building/buying a home via mortgage may offer future retirement benefits i.e freedom from rental expenses

vi. Lowers Rental Expenditure- By owning a home, an individual ultimately breaks the rental cycle.

vii. Versatile- Mortgage loans exist in various options targeted towards different purposes including; home purchase loans, home construction loans, equity release loans,  remortgage, home improvement loan etc

viii. Personalized financial advice- Most majority of mortgage lenders include this as an added benefit to a particular mortgage loan package.

Disadvantages Of Mortgages

i. Foreclosure- refers to forceful seizure of a borrower’s property (usually attached as collateral) due to default in repayments.

ii. Extra Charges- mortgage loans usually attract additional charges including valuation fees, legal fees, stamp duty fees, negotiation fees, appraisal fees etc

iii. Value Depreciation- Depending on market volatility, property value may increase/decrease whereby sellers may incur losses in the event of the latter.

iv. Prolonged Debt- Owing to the long repayment duration of mortgage loans, borrowers are left to bear debt obligations that need to be met within the validity period failure to which foreclosure may prevail.

How To Choose Best Mortgage Lender

Mortgage Bank Rates Providers In Kenya

Owning a home provides a unique sense of fulfillment because it eliminates rental costs and provides a location to live out one’s retirement years. Because of this, a number of banks provide mortgage loans to help prospective homeowners realize their dream of owning a home.

Below, we examine a few Kenyan banks that provide mortgage loans, their characteristics and benefits, and the criteria necessary to get approved for them.

Absa Bank Kenya

Buy A Home

This involves purchasing a home found through a property listing. The process entails locating a property, obtaining the property registry details, making an offer to the owner, applying for the mortgage loan and upon approval, commencement of valuation and payment of stamp duty.

Absa’s home loan finances up-to 90% and holds a maximum repayment duration of 25 years with a security charge over the property. The mortgage bank rates costs involved in buying a home include;

Costs % Mortgage Amount
Valuation 0.25% property value
Protection cover 0.3%
Fire insurance 0.13%
Legal 1.2%
Negotiation up-to 2%
Charge stamp duty 0.1%
Transfer stamp duty 4% home value/ 2% upcountry

Build A Home

Involves building on already available land/ purchasing land to build on. The process of building a home via Absa requires that intended construction site must be in a residential area, prior approval of building plans by the relevant authorities as well as bill of quantities must be drawn by independent and qualified quantity surveyor.

In addition, the loan is disbursed in four equal phases of 25% each subject to architect’s certificate & relationship manager report whereby stage valuations are conducted through each phase.

The Absa construction loans finances 100% for already owned land and up-to 80% for land purchase + construction with a 9 month moratorium during construction after which repayment starts and should be finalized within a period of 20 years.

Furthermore, there exists a fixed-price contract for amounts exceeding KES10m whereby interest is paid only on the amount drawn. The mortgage bank rates costs involved in the constructing a home include;

Costs % Mortgage Amount
Transfer stamp duty 4% home value/ 2% upcountry
Charge stamp duty 0.1%
Negotiation Up-to 2%
Legal 1.2%
Fire insurance 0.13%
Protection cover 0.3%
Valuation 0.25% property value

Equity Release Loan

Involves using your property’s value as collateral for cash loan whereby the property value for Nairobi environs should exceed Ksh2m while for upcountry Ksh1.5m in which case, one can receive up-to 80% cash loan from the property value.

The mortgage bank rates costs involved in the equity release loan include;

Costs % Mortgage Amount
Legal 1.2%
Transfer stamp duty 4% home value/ 2% upcountry
Negotiation Up-to 2%
Valuation 0.25% property value
Protection cover 0.3%
Charge stamp duty 0.1%
Fire insurance 0.13%

Buy-To-Let

Involves purchase of property for renting purposes whereby no moratorium is needed, loan is exclusive to single-family occupant houses only and also requires a 12-month rental lease agreement upon purchase.

The mortgage bank rates costs involved in the Buy-To-Let loan include;

Costs % Mortgage Amount
Fire insurance 0.13%
Protection cover 0.3%
Valuation 0.25% property value
Negotiation Up-to 2%
Legal 1.2%
Transfer stamp duty 4% home value/ 2% upcountry
Charge stamp duty 0.1%

Re-mortgage

Involves transfer of mortgage institutions whereby property value for Nairobi environs should exceed Ksh2m while for upcountry Ksh1.5m, incurs zero deposit charges, interest rate charges from 12.75% to 14% on reducing balance with repayment duration of up-to 25%.

The mortgage bank rates costs involved in Re-mortgage loan include;

Costs % Mortgage Amount
Protection cover 0.3%
Fire insurance 0.13%
Legal 1.2%
Negotiation Up-to 2%
Charge stamp duty 0.25%

**Absa Mortgage Calculator

Bank Of Africa

Home Improvement Loan

This loan is intended for renovations on existing existing property whereby it can either be a top-up on current mortgage or new loan.

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Property Acquisition Loan

This loan is intended for home, commercial or residential purchases for occupation, business or investment purposes whereby the purchased property becomes the security/collateral for the loan.

Equity Release Loan

Involves the use of personal property as collateral for loan.

Construction Loan

Involves financing towards development of new properties for occupation, business or investment purposes.

To access any of the above BOA mortgage finance products, an applicant is required to meet the below eligibility requirements which include;

i. Duly completed and signed loan application form.
ii. A sale agreement/offer letter.
iii. Copy of identity such as identification card or passport and registration documents for a business.
iv. Proof of income i.e. payslips.
v. Bank statements for the last six months.
vi. Copy of the title for the property offered as collateral.
vii. A valuation report from a valuer in the bank’s panel (can also be availed after approval).
viii. Letter of introduction and undertaking from employer for employed persons.
ix. Open a Current account.

Bank Of Baroda

Baroda Mortgage Loan

Also referred to as BML, involves a margin whereby 35% of the forced sale value of the immovable property to be mortgaged with the bank, requires comprehensive property insurance, legal property charges and individual borrower credit life coverage.

To be eligible for the BML, an applicant is required to be at least 21 years old, earning a salary or in business. The loan amounts are between Ksh1M – 100M whereby for salaried individuals is 36 times monthly gross income while for business people it is 5 times gross annual income for the last 2 years.

The BML repayment period requires 120-equated monthly installments.

**Baroda Home Loan EMI Calculator

Bank Of India

StarHome Loan Scheme

The loan purpose is targeted towards either the purchase of property for ownership, renovation of existing property, land purchase for construction or purchase of furnishings.

Eligibility for the loan requires salaried individuals on permanent employment basis, self-employed individuals with regular income, corporate borrowers or occupations such as lawyers. doctors, engineers etc

Consolidated Bank

Mortgage Loan

Co-operative Bank (Co-op)

Good Home Mortgage [Improved]

Involves purchase of house or land to build on whereby the bank offers up-to 90% financing of the property value. It is accessible to both employed and self-employed individuals with a Co-op salary or business account with up-to 6 months activity.

The loan amounts are between Ksh500K – 6M at 9.9% interest reducing balance repayable within 15 years (employed) and 10 years (self-employed). Application can be done individually or jointly as long as the total income is Ksh150K or less.

Acquisition Loan

Involves financing for home ownership or investment property purchase.

Construction Loan

Involves building of residential or commercial property.

Equity Release

Involves construction or property purchase purposes whereby one can borrow against owned property.

Plot Purchase

Involves financing for buying a plot

Plot, Buy & Build

Involves financing to purchase land and construct a home

Renovation

Involves financing to improve property features

Enwealth (Retirement Benefits Mortgage Loan)

Involves utilization of 40% of one’s retirement benefits to purchase a house in full, or as a down payment for a house whose selling price is higher than the pension benefits.

The process involved entails identification of a house, application of retirements benefits mortgage loan from Co-op bank and upon approval & property valuation, application to pension scheme to access 40% of accrued pension benefits and upon approval, the pension scheme undertakes the seller & bank to pay the same.

Any individual below the retirement age is eligible for the retirement benefits loan as long as the 40% of the accrued benefits is sufficient to cater for the whole purchase price. If it is not, approval is based on repayment ability and retirement duration. The repayment period for the loan is up-to 20 years subject to retirement age.

The mortgage bank rates costs involved in the retirement mortgage loan includes;

Costs % Mortgage Amount
Transfer stamp duty 4% home value/ 2% upcountry
Charge stamp duty 0.1%
Legal 1.5-2%
Valuation 0.25% property value
Insurance

Business Mortgage & Construction Loan

Involves financing aimed at construction or renovation of residential or commercial properties with a maximum repayment period of 20 years for single dwelling units and 10 years for residential commercial units.

Requirement for eligibility include;

i. Copies of identification documents, that is, Memorandum and Articles of Association as well as a Certificate of Incorporation (for registered companies)
ii. Business Registration Certificate
iii. National ID for borrowers without registered businesses
iv. National ID for directors of registered companies/businesses
v. 6-months’ bank statements
vi. Audited accounts for loans above Ksh5M
vii. Resolution to borrow (for registered companies) and details of business location
viii. Necessary approvals by City Council, the local authorities, NEMA and securities to be provided

**Co-op Bank Loan Calculator

Diamond Trust Bank (DTB)

DTB Mortgage

The DTB Mortgage is purposely for the purchase of new / existing residential houses, renovations/repairs/ extensions of existing unencumbered property or takeover of existing housing loans from other financial institutions.

It advances loans of between Ksh1M – Ksh100M at the prevailing market interest rate to be repaid within a 20-year period subject to retirement age. It has a debt burden ratio not exceeding 50% of net salary and a loan to value collateral ratio of 90% property value.

It also attracts 2% appraisal fees as well as fire & burglary protection cover & borrower mortgage protection cover.

Dubai Islamic Bank

DIB Mortgage Finance

Ecobank

Mortgage Loan

Equity Bank

Business Mortgage Finance

Involves a loan facility aimed at purchase of real estate property with ability of rental income. It generally includes the property insurance, investment advisory services, value added services such as negotiated legal fees, valuation services and competitive commitment and entry fees.

In addition, the repayment period on home purchase is a maximum 20 years while on commercial property purchase it is a maximum 10 years.

Construction Loan

Involves a loan facility aimed at the construction of property for residential/commercial use. It has a repayment period of 10 years. It also includes value added services such as negotiated legal fees, valuation services as well as tailored products beneficial to the business.

To become eligible for the loan, an applicant is required to have an active Equity bank account, clearly state the loan’s purpose for financing business working capital and operational needs during application as well as clearly state any other additional income sources that may be used towards the loan repayment.

Diaspora Residential Mortgage & Equity Loan

Involves financing for the purchase of a single family home or 1 condo/apartment unit on the same property as well as allowing homeowners to borrow against the equity in their already owned home/condo.

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The product is reserved for non-resident, expatriate & dual-citizen Kenyans. It offers up-to 80% financing dependent on property location from as low as Ksh2M to be repaid within 15 years.

Commercial Mortgages & Equity Release Loan

Involves financing for the purchase of 2 or more houses in the same community, 2 or more condos/apartments on the same property, or an entire condo/apartment building. The product is reserved for non-resident, expatriate & dual-citizen Kenyans.

It offers up-to 80% financing dependent on property location from as low as Ksh3M (Equity release) and Ksh4M (commercial loan) to be repaid within 10 years.

Plot Purchase & Equity Loans

Involves the finance of plot purchases allowing owners to access loans against the equity in their already owned pieces of property. The product is reserved for non-resident, expatriate & dual-citizen Kenyans.

It offers up-to 70% financing dependent on property location with no minimum/maximum loan amount limits to be repaid within 10 years.

Personal Plot Loans

Involves a 100% financing option with a repayment tenure of up-to 10 years enabling customers purchase land/plots for either business/residential purposes.

To become eligible for the loan, prior MOU between Equity bank & employer is required and implementation of salary check-off system.

Other requirements include three original latest pay slips, two copies of national ID, KRA PIN certificate, employer introduction/appointment/confirmation letter, duly signed authorization forms, duly completed loan application and appraisal form, sale agreement, valuation report and title deed.

Personal House/Home Loans

Involves a loan facility that enables Equity customers to purchase complete house units or construct homes either for residential or commercial purposes. It offers 100% financing repayable within 15 years.

Eligibility depends on existing MOU between employer & Equity bank, ability to make repayment as well as salary check-off system availability.

To apply for the loan, simply submit the necessary documentation such as three original latest pay slips, two copies of national ID, KRA PIN certificate, employer introduction/appointment/confirmation letter, duly signed authorization forms, duly completed loan application and appraisal form, sale agreement, valuation report and title deed.

Family Bank

Brick By Brick

Involves financing aimed at building of a home in phases with payment at affordable stages. To apply for this loan, provide the requirements including; copy of title deed, copy of ID/PIN certificate for individual/business (directors) and valid sale agreement/letter of offer from the seller.

Others include last 3 months’ pay-slips, employer letter, 6-months’ bank statement and one passport size photograph.

Personal Plot Loans

Involves the purchase of land for future development.

To apply for this loan, provide the requirements including; copy of title deed, copy of ID/PIN certificate for individual/business (directors) and valid sale agreement/letter of offer from the seller.

Others include last 3 months’ pay-slips, employer letter, 6-months’ bank statement and one passport size photograph.

Construction Loan

Involves financing of land for development purposes for both residential and real estate housing based on land value and development type.

Estate Development

Involves financing dependent on project scale for developers putting up houses for sale. Loan application requirements for this type of loan involves prior approved building plans & structural drawings, priced bills of quantities, feasibility study project viability confirmation, duly executed formal contract between contractor & project developer.

Furthermore, approval from National Environmental Management Authority (Project team to submit their comprehensive CVs, registration certificates and profiles of successful works done in the last 5-10 years)

First Community Bank

FCB Mortgage

This product offers up-to 90% financing with repayment of 10 years (business mortgage) and 20 years (personal mortgage). It also requires a minimum deposit of 10% with financing limits of 70%

To apply, the requirements include; copy of ID and KRA PIN certificate, employment letter detailing engagement terms, latest 3 months’ payslips, latest 6 months’ certified bank statements, salary check-off, loan application form, sale agreement invoice and purchase invoice registers and copy of sale registers available for review.

Plot/Land

This product assists in the purchase of land repayable within 5 years requiring a 30% and 40% minimum deposit for urban and rural areas respectively. Also, collateral is discounted at 70%, 60% & 40% for urban, rural and agricultural land in that order.

To apply, the requirements include; copy of ID and KRA PIN certificate, employment letter detailing engagement terms, latest 3 months’ payslips, latest 6 months’ certified bank statements, salary check-off, loan application form, sale agreement invoice and copy of title deed.

Construction Loan

This product offers up-to 80% financing for a period of 10 years with a minimum contribution of 20% whereby the applicant is obligated to provide land for construction along with 20% of total project cost.

The application requirements include; copy of ID and KRA PIN certificate, employment letter detailing engagement terms, latest 3 months’ payslips, latest 6 months’ certified bank statements, salary check-off, loan application form, sale agreement invoice and purchase invoice registers and copy of sale registers available for review.

Gulf African Bank

Personal Home Finance

This product is based on the diminishing Musharaka Shariah Agreement and offers financing with a repayment tenure of up to 20 years. It also offers free financial consultation as well as access to Insurance Premium Financing for the domestic package insurance.

Requirement for the home finance include; duly completed facility application form, duly signed sale Agreement/Vendors Offer Letter/Draft Sale Agreement, certified payslips for the last 3 months, employer introduction letter, copy of title deed, certified bank statements for the last 6 months, copy of national ID/Passport, copy of KRA PIN Certificate and 1 passport size photo

Personal Construction Finance

The product entails free financial consultation coupled with flexible monthly installments up-to 20 years. The requirements for this loan include;

Requirements Project Approvals
Certified pay-slips for the latest 3 months (one can incorporate joint income with a spouse) Approved building plans and approved structural drawings prepared by an Architect duly registered by the Architectural Association of Kenya (ASK)
Submission of Letter of introduction from the employer confirming employment status (stating terms, retirement age, salary etc.) NEMA approval where applicable
Original or certified (by bank) salary bank statements for the latest 6 months National Construction Authority approval (NCA)
Copy of ID Card/ Passport and KRA PIN Certificate Supporting Bills of Quantities ( BOQ) drawn by appointed Quantity Surveyor (QS)
One coloured passport size photo Copy of executed building contract agreement stipulating the appointed professionals
Copy of title to the property being purchased/charged with a minimum lease term 45 Years Main contractor to take out a contractor’s all-risk insurance
Evidence of the project equity contribution by customers of a minimum 30% of the BQ cost excluding the value of Land Evidence of existing sources of income to service monthly rentals during the construction period
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Personal Plot Finance

This product provides up-to 70% financing of the property value with a repayment period of 10 years and 2% documentation & administration fee.

SME Construction Finance

SME Mortgage Finance

Housing Finance

Home Loan

Plot Purchase

Office Space Purchase

I&M Bank

Home Loan

Kenya Commercial Bank (KCB)

Personal Home Loan

This product provides up-to 70%, 80% and 90% financing for plot purchase, income generating properties and owner occupier respectively. It is also open to all employed, self-employed and diaspora.

Loan amounts begin from Ksh500K with the ability to top-up and repayable within 25 years. The mortgage bank rates costs involved in the personal home loan include;

Costs % Mortgage Amount
Appraisal fees 2.5% of loan amount
Ledger fees Ksh350 monthly
Stamp duty on charge 0.1% of loan amount
Negotiation Fee 2.5% of loan amount
Stamp duty 4% of property value

Corporate Mortgage

Involves the financing for construction and purchase of commercial properties and estates

Diaspora Mortgage

KCB Diaspora mortgage covers for purchase of completed houses, residential property, mortgage top-ups, construction of both commercial/residential property and equity release.

The pre-requisite for the KCB diaspora mortgage loan are;

Requirements Project Approvals
Filled in application form- Notarized Approved Building Plans – by an Architect
Open a KCB Bank account (requirements on a separate write up) Approved Structural Drawings – by Structured Engineer
Pay slips for the latest 6 months*- Notarized Priced Bills of Quantities – by a Quantity Surveyor
Letter from employer confirming employment status (indicating retirement date and whether you are permanent or on contract)* Notarized CVS/profiles of project team – Architect, Structural Engineer, Quantity Surveyor, Contractor, plus registration and practicing certificates
Bank statements for the last 6 months where your salary goes through* Notarized NEMA approval ( for multiple units)
Copy of Kenyan ID and Valid Kenyan Passport * Notarized City Council Approval
Kenya Revenue Authority PIN certificate
3 passport size photos
Offer letter or Sale agreement witnessed by a lawyer
Copy of the title with a minimum lease of not less than 35 years

National Bank Of Kenya (NBK)

Residential Mortgage

This product supports the purchase of an existing and complete house in addition to accommodating customers switching from other financial institutions to National Bank.

Residential Plot Purchase

This product supports in the purchase of land for residential purposes with plots for up-to 5 acres.

Mortgage Top Up

This product supports in the taking up of additional loan on top of the existing mortgage loan.

Equity Release

This product supports in a loan acquisition based on the value of one’s property as collateral.

Residential Construction Mortgage

This product supports in residential property construction or renovation purposes.

Residential Plot & Construction Mortgage

This product supports loan acquisition for the purpose of home construction for residential purposes.

Special Scheme Residential Mortgage

This product supports the one-off construction/purchase of a house for salaried individuals either in the private/public sector enjoying housing benefits from their employer.

USD & GBP Denominated Residential Mortgage

This product supports the purchase/construction of residential houses in foreign currencies such as USD/GBP/EURO.

Amanah Mortgages

This Shariah compliant mortgage product supports in the purchase of new/existing residential houses, purchase of residential plots, mortgage takeovers from other financial institutions for residential properties as well as mortgage schemes for companies with an MOU.

Diaspora Mortgages

This product supports in the buying/construction of property in Kenya while abroad.

NCBA Bank

Home Loan

NCBA home loans offer up to 105% of the property value for individuals seeking for acquisition, construction, and financing of property in both major urban and rural areas within major towns.

It has a loan repayment period of 25 years with a competitive interest rate calculated on a reducing balance basis. The process of home ownership via NCBA home loans begins with loan application, loan approval, submission of NCBA offer letter, valuation of property, issuance of security/collateral and finally disbursement of funds.

NCBA Easy Build

NCBA Easy Build is a construction product that provides a one-stop shop for construction solutions through the engagement of various professional such as project managers, structural engineers, quantity surveyors, architects, mechanical & electrical engineers etc

The product finances up-to 100% of the construction cost inclusive of professional fees as well as offers a 9-month moratorium on the principal amount during construction whereby borrowers only service the interest drawn on funds within the period.

Equity Release

NCBA equity release involves loan facilities of up-to 80% and 90% for value of property on single and investment residential units and residential multiple dwellings and investment commercial property respectively.

It offers a maximum loan repayment period of 5 years for loans up-to Ksh100K and 25 years for loans exceeding Ksh2M.

Plot Loan

This product offers loans for plots situated within major towns such as Nairobi or Mombasa for up-to 70% financing of the plot’s value. In addition, the minimum loan amount is Ksh500K repayable within 36-60 months and attracts a 1% loan facilitation fee (locals) and 2% (diaspora)

Construction Loan

This construction finance facility is aimed towards the development of all types of real estate be it residential, commercial or retail property whether for sale or rental income. It is convertible to mortgage after the construction period with a tenure of 120 months.

It also bears a moratorium on the principal for 24 months whereby the borrower contributes a 30% minimum of the gross construction cost.

**NCBA Mortgage Calculator

Prime Bank

Prime Mortgage

This mortgage facility is limited to to individuals who are citizens or permanent residents to enable them acquire/purchase residential properties. The Bank will finance 70% to 80% of purchase price of the property depending on the location and marketability of the property for term of 10 to 15 years.

SBM Kenya

Personal Mortgage

Diaspora Mortgage

** SBM Kenya Mortgage Calculator

Stanbic

Home Loan

Equity Release

Construction Financing

Vacant Land Financing

Commercial Property Loan

Stanchart Kenya

Home Mortgage

Construction Mortgage

Non-Resident Mortgage

Victoria Commercial Bank (VCB)

Mortgage Loans

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