Step-by-step guide to securing a home loan in Kenya. Learn about eligibility, documentation, application process, and insider tips for approval. Updated October 2025.
A mortgage is a long-term loan secured against property that enables you to buy a home without paying the full purchase price upfront. In Kenya, mortgages typically require a deposit of 10-30% of the property value, with the bank financing the balance over 5-25 years. Understanding the mortgage landscape is crucial for making informed decisions about what is likely the largest financial commitment of your life.
Up to 90%
Of property value financed
11-15%
Annual rates vary by bank
5-25 Years
Flexible loan tenure
Kenyan banks offer different mortgage products to suit various financial situations and risk appetites. Understanding these options helps you choose the most suitable product for your circumstances.
Interest rate remains constant throughout the loan period, providing predictable monthly payments. This protects you from interest rate fluctuations and makes budgeting easier. Fixed rates in Kenya typically range from 12-14% per annum.
Best For:
First-time buyers, those who prefer certainty, and when interest rates are expected to rise.
Interest rate fluctuates based on the Central Bank Rate (CBR) and market conditions. Typically starts 1-2% lower than fixed rates (10-13% p.a.) but can increase or decrease over time. Monthly payments vary accordingly.
Best For:
Risk-tolerant borrowers, when rates are high and expected to fall, those with flexible budgets.
Combines fixed and variable rates. Typically fixed for initial 2-5 years, then switches to variable rate. Offers short-term stability while allowing you to benefit from potential rate decreases later.
Best For:
Those seeking initial payment certainty with future flexibility, expecting income growth.
Designed for building your own home. Funds are released in stages as construction progresses based on quantity surveyor valuations. Interest charged only on disbursed amount until construction completes.
Best For:
Those building on owned land, property developers, when buying land and building is cheaper than buying completed property.
Meeting these eligibility criteria is essential for mortgage approval. Banks assess your ability to repay the loan based on income, existing debts, credit history, and employment stability.
Having all required documents ready before application significantly speeds up the approval process. Document requirements vary slightly between banks, but the following are universally needed.
Important: All documents should be original or certified copies. Ensure documents are current (especially bank statements and land searches). Incomplete documentation is the most common cause of application delays.
The mortgage application process typically takes 4-8 weeks from initial application to disbursement. Understanding each step helps you prepare adequately and avoid delays.
Identify the property you want to buy or land for construction. Conduct due diligence on the property, including physical inspection, location assessment, and preliminary title search. Negotiate purchase price with the seller.
Timeline: Variable (1-4 weeks)
Key Action: Get sale agreement signed by both parties
Compare mortgage offers from multiple banks using PesaMarket comparison tool. Consider interest rates, fees, and loan-to-value ratios. Get pre-qualified to understand how much you can borrow. Pre-qualification is free and doesn't commit you to the bank.
Timeline: 1-3 days
Key Action: Compare at least 3 banks, get pre-qualification letter
Submit completed application form with all required documents to your chosen bank. The bank assigns a relationship manager who guides you through the process. Pay application fee (typically KES 1,000-5,000) and valuation fee (KES 5,000-15,000).
Timeline: 1 day
Key Action: Ensure all documents are complete to avoid delays
Bank appoints an independent valuer to assess the property's market value. The valuer inspects the property and prepares a detailed valuation report. Bank lends based on the lower of purchase price or valuation amount. If valuation is lower than purchase price, you must cover the difference.
Timeline: 1-2 weeks
Key Action: Ensure property is accessible for valuer's inspection
Bank's credit team reviews your application, verifies employment and income, checks CRB report, and calculates your debt service ratio. They may contact your employer or request additional documentation. This is the most critical stage where approval is determined.
Timeline: 1-2 weeks
Key Action: Respond promptly to any information requests
If approved, bank issues a formal mortgage offer letter detailing loan amount, interest rate, repayment period, monthly installments, and all terms and conditions. Review carefully before accepting. Offer is typically valid for 60-90 days.
Timeline: 2-3 days after approval
Key Action: Read offer letter thoroughly, clarify any unclear terms
Bank's lawyers prepare mortgage documents including mortgage deed, charge document, and loan agreement. You sign these documents before a lawyer or commissioner of oaths. Property title is transferred to the bank as security until loan is fully repaid.
Timeline: 1-2 weeks
Key Action: Can use bank's lawyer or your own (at your cost)
Arrange mortgage protection life insurance (covers outstanding loan in case of death/disability) and property insurance (building and contents). Bank usually facilitates this. Insurance premiums can be added to the loan amount.
Timeline: 3-5 days
Key Action: Compare insurance quotes if bank allows external insurers
Once all conditions are met, bank disburses the loan. For property purchase, funds are paid directly to seller's lawyer or seller's account. For construction, funds released in stages based on work completion. You start repaying the month after disbursement.
Timeline: 2-5 days
Key Action: Confirm disbursement date with all parties
Seller transfers property ownership to you at the Land Registry. Collect all property documents including keys, utility transfer forms, and warranty documents. Property title is held by the bank until mortgage is fully repaid.
Timeline: Immediate after disbursement
Key Action: Keep copies of all transaction documents safely
Beyond the principal and interest, several upfront and ongoing costs are associated with mortgages in Kenya. Budget for these expenses to avoid surprises.
| Cost Item | Amount/Rate | Payment Timing |
|---|---|---|
| Deposit/Down Payment | 10-30% of property value | Before application |
| Application Fee | KES 1,000-5,000 | At application |
| Valuation Fee | KES 5,000-15,000 | At application |
| Legal Fees | 1-2% of loan amount | Before disbursement |
| Land Transfer Fees | 4% of property value | At property transfer |
| Stamp Duty | 1.5-2% of loan amount | At documentation |
| Processing Fee | 1-2% of loan amount | Before disbursement |
| Life Insurance (annual) | 0.5-1% of loan amount | Ongoing (can be added to loan) |
| Property Insurance (annual) | 0.2-0.5% of property value | Ongoing (can be added to loan) |
| Title Search Fee | KES 500-1,000 | Before application |
Example Calculation: For a KES 10 million mortgage at 13% for 20 years with 15% deposit (KES 1.5M), expect approximately KES 1-1.5 million in upfront fees (deposit excluded) plus ongoing insurance costs of about KES 80,000 annually.
Check your CRB report 3-6 months before application. Clear any outstanding debts, especially mobile loans and credit cards. Dispute any errors on your report. A clean credit history can reduce your interest rate by up to 2%.
Start saving early. Aim for at least 20% deposit to get better rates and avoid mortgage insurance. Banks view larger deposits as lower risk. Consider fixed deposit accounts for better interest while saving.
Have your salary account at the bank where you're applying for at least 6 months. This demonstrates stable income and makes verification easier. Existing customers often get preferential rates.
Pay off or reduce existing loans before applying. Banks prefer debt-to-income ratios below 45%. Avoid taking new loans or credit cards during the application process. Consider consolidating smaller debts.
Just because you qualify for a certain amount doesn't mean you should borrow it. Keep mortgage payments below 30% of your net income. Factor in maintenance, utilities, and potential interest rate increases for variable mortgages.
Properties in prime locations with clear titles are easier to finance. Avoid properties with legal disputes or unclear ownership. Apartments and houses in developed estates typically get faster approvals than rural properties.
Applying with a spouse or co-borrower increases your combined income, potentially qualifying you for a larger loan. Both incomes are considered in affordability calculations. Ensure both have good credit histories.
Apply when CBK rates are low as banks adjust mortgage rates accordingly. Avoid applying during year-end or holiday seasons when processing is slower. Start the process 3-4 months before your desired move-in date.
Interest rates aren't always fixed. Negotiate based on your creditworthiness, deposit size, and existing banking relationship. Ask about promotions or special rates. Get quotes from multiple banks and use them for negotiation leverage.
Use reputable real estate agents, lawyers, and mortgage brokers who understand the Kenyan market. They can identify potential issues early and guide you through complex processes. Their fees are often worth the peace of mind and time saved.
Understanding why applications get rejected helps you avoid these pitfalls and improve your chances of approval.
Most common reason. Includes loan defaults, late payments, mobile loan arrears, or CRB blacklisting. Even small unpaid debts can be disqualifying.
Monthly income too low to support mortgage payments. Debt-to-income ratio exceeds bank's limits (typically 45-50%).
Unable to provide required deposit or source of deposit funds cannot be verified. Borrowed deposit funds are often rejected.
Unclear title ownership, property disputes, illegal structures, property in undesirable location, or valuation lower than purchase price.
Short employment duration, frequent job changes, or uncertain income for self-employed applicants. Contract/temporary employment may be viewed as risky.
Missing required documents, expired documents, or inability to verify provided information. Discrepancies between application and supporting documents.
Too young (under 21) or age at loan maturity exceeds bank's limit (typically 60-65 years). Shorter remaining working years limit loan tenure and affordability.
Applying to many banks simultaneously raises red flags. Recent hard inquiries on credit report suggest financial distress.
Most Kenyan banks require a minimum deposit of 10-15% of the property value. However, a 20-30% deposit gives you access to better interest rates and terms. First-time buyers may access special programs with lower deposit requirements through the National Housing Development Fund.
Yes, but requirements are stricter. You'll need at least 2 years of audited accounts, KRA tax returns, business registration documents, and proof of consistent business income. Some banks require self-employed applicants to provide larger deposits (20-30%).
Fixed rates offer payment certainty but typically start 1-2% higher. Variable rates start lower but can increase. Choose fixed if you prefer stability and expect rates to rise. Choose variable if you can handle payment fluctuations and expect rates to fall. Your risk tolerance and financial flexibility should guide this decision.
The complete process typically takes 4-8 weeks from application to disbursement. Existing customers with complete documentation may get faster approval (2-3 weeks). Delays often occur during valuation, legal processes, or incomplete documentation.
Most banks allow early repayment but may charge a penalty of 1-3% of the outstanding balance. Some banks waive penalties after a minimum period (e.g., 5 years). Review your mortgage agreement carefully as terms vary between lenders. Early repayment can save significant interest costs.
Contact your bank immediately if you anticipate payment difficulties. Banks may offer solutions like payment holidays, loan restructuring, or temporary interest-only payments. Continued default can lead to penalties, legal action, and eventually property foreclosure. Your credit score will also be negatively affected.
Yes, but you must inform your bank. Some mortgage terms restrict renting, especially for owner-occupier mortgages which have better rates. Buy-to-let mortgages are specifically designed for rental properties but have higher interest rates (typically 1-2% more).
Yes, homeowners can claim mortgage interest relief up to KES 300,000 per year (KES 25,000 monthly) on their first home. This reduces your taxable income. You must provide documentation from your bank to KRA when filing returns. This benefit applies only to owner-occupied residential properties.
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