Kenya's Mortgage Terms

Kenya’s mortgage term on average is one of the lowest on the continent according to the 2020 edition of the Centre for Affordable Housing Finance (CAHF) Year Book.

This is the duration over which a person who receives a mortgage loan is required to complete payment of loan interest and principal.

The typical mortgage term in the country is ten years despite the country having one of the highest number of mortgage providers on the continent. Most African jurisdictions have a typical mortgage term of 20 years.

The report shows that Guinea-Bisau has the lowest mortgage term of five years with a mortgage rate of 11%. The country has only 4 mortgage providers.

Unlike Kenya’s mortgage term (10 yrs), Mauritania has one of the most favourable mortgage regimes on the continent with a typical mortgage term of 35 years and a mortgage interest rate of 8 per cent. In addition, the down payment requirement is just 10%.

In São Tomé and Príncipe, you require a down payment of 50% to get a 20-year mortgage at 7% while a few other countries require 40%.

Gabon has the lowest mortgage interest on the content at 3% with a typical term of 20 years while Zambia has the highest mortgage interest at 32% also at a 20-year term.

“While finance makes housing possible, it is also true that housing makes finance possible. Housing constitutes a vital component of the financial system, and plays a critical role in financial intermediation, assisting the flow of money through the economy,” says the report, highlighting the connection between housing, finance and the economy.

“This is because housing is a leverage-able asset that can be used as collateral for other loans, thereby enabling private investment,” it adds.

Read; Proposed bill to cushion tenants and mortgage owners

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