mortgage loans in kenya

As the saying goes, east or west, home is best! There’s definitely nothing as relaxing as the confines of one’s own living space after a grueling hard day’s work.

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Be it a college cubicle or a rented apartment, anywhere can be a place to kickback, unwind and recharge.

However, there’s that special satisfaction that comes with owning a home and doing away with rental expenses as well as having a place to live out one’s retirement days.

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It is for this reason that various banks offer mortgage loans for aspiring home owners to make it a reality.

Below, we look at some of the Kenyan banks that offer mortgage loans, features/benefits of the said loans as well as the requirements needed to qualify for the loans.

( Please note that this list is in no particular order )

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1. ABSA BANK 

A) Home Loan Straight Purchase

FeaturesRequirements
Intended for anyone who wants to own a homePayslips – latest 3 month’s payslips (6 months if allowances are paid)- For salaried
Repayment period of up to 25 yearsLetter from employer confirming terms of employment, anticipated retirement age, basic salary and allowances indicate the fixed and variable ones, date of employment/length of service and position held at company.- For salaried
Purchase the desired property anywhere in the countryPin certificate- For salaried
Up to 90% financeNational ID or passport- For Salaried
Security charge over property12 months’ statements for non-customers- For Salaried
Transfer stamp duty – 4% of home value / 2% for upcountryMarriage certificate for joint applicants- For Salaried
Stamp duty on charge – 0.10%Regular income, i.e consultancy fees, rental income- For professionals
Negotiation fees – 1-2%Latest 3 years’ audited accounts – For professionals
Legal fees – 1.20%12 months’ bank statements- For professionals
Fire insurance – 0.13%Professional license and registration certificate by the relevant professional boar- For professionals
Home loan protection cover – 0.30%Certificate of registration/incorporation, memorandum and articles of association, and trading license.- For Business customers
Valuation fees – 0.25% of value of propertyAudited accounts for the last 3 years (operated business for at least 4 years)- For Business customers
 Account holder of Absa- For Business customers
 Annual tax return- For Business customers
 Age 18 to 55 years- For Business customers
 Equity contribution of 20%- For Business customers

B) Construction Loan

FeaturesRequirements
Up to 100% of the construction costs if a plot is already ownedPayslips – latest 3 month’s payslips (6 months if allowances are paid)- For salaried
Up to 80% for buying and building – with a maximum 20-year payback periodLetter from employer confirming terms of employment, anticipated retirement age, basic salary and allowances indicate the fixed and variable ones, date of employment/length of service and position held at company.- For salaried
Fixed-price contract for amount above KES10mPin certificate- For salaried
9-month moratorium during construction after which repayment startsNational ID or passport- For Salaried
Interest paid only on the amount drawn12 months’ statements for non-customers- For Salaried
Construction loans are disbursed in four phases, 25% of the loan at a time – subject to architect’s certificate and relationship manager report.Marriage certificate for joint applicants- For Salaried
Building plans must be approved.Regular income, i.e consultancy fees, rental income- For professionals
Bill of quantities (BQs) must be drawn by independent and qualified quantity surveyor.Latest 3 years’ audited accounts – For professionals
Construction site must be urban property intended for residential use.12 months’ bank statements- For professionals
Both pre and post-construction evaluation fees are applicable.Professional license and registration certificate by the relevant professional boar- For professionals
Stage valuations are done throughout the construction process.Certificate of registration/incorporation, memorandum and articles of association, and trading license.- For Business customers
 Audited accounts for the last 3 years (operated business for at least 4 years)- For Business customers
 Account holder of Absa- For Business customers
 Annual tax return- For Business customers
 Age 18 to 55 years- For Business customers
 Equity contribution of 20%- For Business customers

C) Equity Release

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FeaturesRequirements
Get up to 80% of the value of your property in cash. 
Repayment period is 15 years. 
Value of property needs to be more than KES2m (Nairobi) and KES1.5m (up country). 
Security: charge over property. 
Valuation fees: 0.25% of property value. 
Transfer stamp duty- 4% of home value / 2% for upcountry 
Stamp duty on charge – 0.1% 
Negotiation fees – 1% to 2% 
Legal fees – 1.2% 
Fire insurance – 0.125% 
Home loan protection cover – 0.3% 
Valuation fees – 0.25% of value of property 
  
  

D) Buy-To-Let

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FeaturesRequirements
Loan up to 70% of property value 
Purchase up to six properties 
Finance is available for single-family occupant houses only. 
A 12-month rental lease must be signed upon purchase. 
No moratorium is available. 
Transfer stamp duty – 4% of home value / 2% for upcountry 
Stamp duty on charge – 0.10% 
Negotiation fees – 1% to 2% 
Legal fees – 1.2% 
Fire insurance – 0.125% 
Home loan protection cover – 0.3% 
Valuation fees – 0.25% of value of property 
Stamp duty – 4% or 2% depending on the location 
  
  

E) Re-Mortgage

FeaturesRequirements
Value of property: more than KES2m (Nairobi) and KES1.5m (up country) 
Interest rate: 14% on reducing balance 
Deposit: 0% 
Tenure: up to 25 years depending on retirement age 
Security: discharge and charge over property 
Stamp duty on charge – 0.25% 
Negotiation fees – 1% to 2% 
Legal fees – 1.25% 
Fire insurance – 0.15% 
Home loan protection cover – 0.3% 

F) Business Mortgage Loan

FeaturesRequirements
Use your business mortgage to buy premises or release equity 
You can choose from a fixed or variable rate of interest. 
The maximum loan will be determined by the value of the property. 
The minimum value of the property must be KES3 million for Nairobi and KES1,2 million for rural areas. 
The business must be in existence for at least 4 years, showing profits in the last 3 years of operation. 
Get loan repayment cover for your mortgage. 
Use your mortgage for equity release on residential property 
Obtain mortgage for commercial purposes where the business will be operating. 
Get mortgage for owner occupation for a first and second home or you can re-finance to get another loan 
  
  
  

2. BANK OF AFRICA

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A) BOA Mortgage Finance

FeaturesRequirements
Capital gains from property appreciation.A duly completed and signed loan application form.
Savings on rent.A sale agreement/offer letter
Flexible terms of repayment.Copy of identity such as identification card or passport and registration documents for a business.
Personalized customer service.Proof of income i.e. payslips.
Financial advice on mortgage products.Bank statements for the last six months.
Tax benefit through mortgage relief.Copy of the title for the property offered as collateral.
Own occupation.A valuation report from a valuer in the bank’s panel (can also be availed after approval).
 Letter of introduction and undertaking from employer for employed persons.
 Open a Current account.

3. BANK OF BARODA

A) Baroda Home Loan

FeaturesRequirements
Maximum loan amount of Kes. 100 million.Regular income
Maximum loan tenor is 15 yearsMinimum age of 21 years
Embedded credit life protection insurance in the loan repaymentsValid identification
Simple one step application form and process for applying and hassle free approval. 
Rate of Interest CBR+4% 
Loan processing fee will be refunded on availment. 
No facility renewal fee, No minimum income requirements, penalty for early repayment. 
Joint borrowing with close family members is allowed. 
Protection of credit life insurance, which can also be financed 
  

B) Baroda Mortgage Loan

C) Baroda Home Improvement Loan

3. CONSOLIDATED BANK

 

 

 

A) Mortgages

 

 

 

This is a product designed to service the needs of customers who may wish to own or build their home through purchase or construction of a residential or commercial property, purchasing a plot, equity release or project finance.

FeaturesRequirements
 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
 Bank statements for the last 6 months- For self employed
 Business registration certificate- For self employed
 Cash flow projections- For self employed
 Copy of the latest annual filing returns and receipts- For self employed
 A brief history of the business and nature of the business- For self employed
 Audited accounts for a period of 3 years- For self employed

4. EQUITY BANK

A) House/ Home

This is a loan facility that enables Equity customers to purchase complete house units or construct homes either for residential or commercial purposes.

FeaturesRequirements
The loan amount is based on the customer’s ability to pay.Three original latest pay slips
The loan period is up to 180 months (15 years).2 Copies of the ID & Pin certificate.
Financing Margin – up to 100% financing.An introduction/Appointment/Confirmation letter from the employer.
Must have an existing MOU with the customer’s employer.Duly signed authorization forms.
Salary is not a prerequisite for some employers.Dully completed loan application and appraisal form
Must have the ability to payValuation report
Ability to effect loan deductions on check-off is required.Title deed

B) Plot Loans

This is a long-term facility to enable customers purchase land/plots either for residential or commercial purpose.

FeaturesRequirements
The loan amount is based on the customer’s ability to pay.Three original latest pay slips
The loan period is up to 120 months (10 years).2 Copies of the ID & Pin certificate.
Financing Margin – up to 100% financing.An introduction/Appointment/Confirmation letter from the employer.
Equity must have an existing MOU with the customer’s employer.Duly signed authorization forms.
Salary is not a prerequisite for some employers.Dully completed loan application and appraisal form
Must have the ability to pay.Sale agreement
Ability to effect loan deductions on check-off.Valuation report
 Title deed

5. FAMILY BANK

A) Estate Development

Estate development, or project financing, is tailored for developers putting up houses for sale.

FeaturesRequirements
Financing repayable within 24 months.Approved building plans
Financing terms are dependent on the scale of the project and fulfillment of the outlined requirements.Approved structural drawings
 Priced bills of quantities
 Approval from National Environmental Management Authority (NEMA). Project team should submit their comprehensive CVs, registration certificates and profiles of successful projects completed in the past 5-10 years
 Feasibility study confirming viability of the project
 Formal contract between the developer and the contractor duly executed

B) Construction Loans

 

FeaturesRequirements
 Business registration certificate
 Bank statements for the last 12 months
 Books of accounts or cash flow statements
 One passport size photograph
 Articles of Association and Memorandum of Association
 Certificate of incorporation
 Board resolution to borrow
 Bank statements for the past one year
 Audited accounts for the past 3 years
 Management accounts
 Cash flow
 Duly completed loan application forms

C) Company Schemes

These schemes enable employees and members of the group to access mortgage loans at subsidized rates.

 

FeaturesRequirements
 Business registration certificate
 Bank statements for the latest 12 months
 Books of accounts or cash flow statements
 One passport size photograph
 Articles and memorandum of association
 Certificate of incorporation
 Board resolution to borrow
 Bank statements for the last one year
 Audited accounts for the last 3 years
 Management accounts
 Cash flow
 Duly completed loan application forms

D) Brick-By-Brick

Build your home in phases and pay in affordable stages. What’s more, you can move in to your home once the first phase is completed.

You can then decide to take a break from building and carry on later, or continue with construction as you live rent free, comfortably and safely in your new home.

FeaturesRequirements
Build your home in phases and pay in affordable stagesBusiness registration certificate
Choose to take a break from building and carry on laterBank statements for the latest 12 months
Your new home will grow with you as your finances and circumstances allowBooks of accounts or cash flow statements
Embark on the next phase of your construction whenever you are readyOne passport size photograph
Organized and affordable mannerArticles and memorandum of association
 Certificate of incorporation
 Board resolution to borrow
 Bank statements for the last one year
 Audited Accounts for the last 3 years
 Management accounts
 Cash flow
 Duly completed loan application forms

E) Owner Occupier

Owner Occupier is collateralized by the dwelling house and is best especially if you are considering acquiring your first home for your family occupation

We grant a purchase loan to buy ready-built residential house or construction of a house .

 

FeaturesRequirements
The repayment for owner occupier mortgage is capped at a maximum of 25 yearsBusiness registration certificate
 Bank statements for the past 12 months
 Books of accounts or cash flow statements
 One passport size photograph
 Articles of Association and Memorandum of association
 Certificate of incorporation
 Board resolution to borrow
 Bank statements for the past one year
 Audited accounts for the past 3 years
 Management accounts
 Cash flow
 Duly completed loan application forms
  

F) Plot Loans

Plot loans are open to both individuals and investors who would wish to purchase land for future development.

FeaturesRequirements
 Business registration certificate
 Bank statements for the past 12 months
 Books of accounts or cash flow statements
 One passport size photograph
 Articles of Association and Memorandum of Association
 Certificate of incorporation
 Board resolution to borrow
 Bank statements for the past one year
 Audited accounts for the past 3 years
 Management accounts
 Cash flow
 Duly completed loan application forms

6. I&M BANK

A) Home/ Mortgage

7. KENYA COMMERCIAL BANK

A) KCB Home Loan

 

FeaturesRequirements
Borrow loan amounts from Ksh 500,000Pay slips for the last 3 months
Repayment period of up-to 25 yearsLetter from employer confirming employment status
Financial access to 90% ( owner occupier ), 80% ( income generating activities ) & 70% ( plot purchase )Bank statements for the latest 6 months
Available to salaried, self employed, contracted and Kenyans in diasporaNational ID or valid Passport
Easily accessible express interest at over 200 KCB branches country-wide.KRA PIN certificate
Access to Home loan top-upThree passport size photographs
Appraisal fees at 2.5% of loan amountSale agreement duly signed by both parties and witnessed by a lawyer.
Ledger fees of Ksh350 per monthTitle to property being purchased/charged (minimum lease term must be at least 35 years)
Stamp duty on charge (0.1% of loan amount)Open a mortgage account with an opening balance of Kshs.10,000
Insurance to cover life and propertyA third of your basic salary is to be left to cater for your living expenses
Valuation feesBank statements for the last 12 months
Legal feesKRA PIN Certificate
Negotiation Fee of 2.5% of loan amountCertificate of Registration & Trading License
Stamp duty at 4% of cost of property or value on the open marketPartnership Deeds
Insurance premium can be financed by KCBAudited Books of Accounts
 Income tax return
 Tenancy agreements for rented properties/rental schedules
 Memorandum & Articles of Association
 Certificate of Incorporation
 Audited Books of Accounts
 KRA PIN Certificate
 Tax Compliance Certificate
 Directors Resolution to Borrow
 Approved building plans
 Approved structural drawings
 Priced bills of quantities
 Profiles for the architect, contractor and quantity surveyor
 NEMA approval
 NCA Certificate

8. NCBA BANK

A) NCBA Home Loan

9. STANDARD CHARTERED BANK

A) Home Mortgage

B) Construction Mortgage

C) Non-Resident Mortgage