Mortgage Market Kenya

By Kilundo Mbithi

A mortgage is a legally binding document used by banks or other creditors to lend you money on interest to help in the purchase of property. The mortgage agreement gives the lender the right to take ownership of your property if you fail to repay the money you’ve borrowed plus interest or to transfer full ownership upon the payment of the debt.

In ordinary terms, this means that the bank will only lend you if you give it a title to the property. A very popular question is usually whether you can get a mortgage in exchange of title to a vacant land. The answer is YES!

A mortgage has its pros and cons, which is not the subject of this piece, but many people agonize over the process of obtaining a mortgage. To make it clear, below are the stages of getting a mortgage:

  1. Approval

This is where the applicant makes an application. The application is considered based on the applicants score on certain parameters such as length of contract, amount of personal expenses, documentation of property to be used as collateral, age, credit score among others. At this stage the application is approved or rejected

  1. Processing

Once the application is approved, you go to stage 2 which is processing. This stage involves the applicant providing the bank with the required documentation and details.

Related; List of Kenya’s Largest Mortgage Lenders

Such documentation and details include identification documents, spousal consent, sale agreement/ or offer letter (if it is for purchase of property), valuation report.

  1. Offer

Successful processing will culminate in an offer being issued to the borrower.  The offer letter stipulates the terms and conditions of the mortgage. The borrower is required to accept the offer terms in order for the lender to proceed to perfection of lending instruments

  1. Perfection of instruments

If the borrower accepting the terms contained in the offer letter, the lender moves to perfection of the instruments of mortgage. Where the borrower is purchasing the property to be used as collateral the lender provides an undertaking to the seller of the property for the release of original certificate of title, transfers, and other relevant documents.

Also Read; What To Do Before You Take The Mortgage

With the title and other registration material now in the custody of the lender, the lender then registers a charge (a means by which lenders enforce their rights to the property) against the title for the sum borrowed.

  1. Payment

Upon a successful registration of a charge on the title, the lender pays the sum borrowed either to the borrower or to the seller of the property depending on the nature of the transaction. This whole process can take anywhere between 90 to 180 days. The process will largely depend on the organization of the borrower in terms of providing the necessary documentation and the speed of the registration at the lands department.

As a consultant, I have observed that most borrowers are not prepared accordingly when approaching a mortgage process.  I recommend you educate yourself fully on the process to avoid unnecessary back and forths during the processing stage.

Read; Lower mortgage rates key to affordable housing in Africa

To cap the mortgage process, below is a list of the most important documentation that you require to have as you apply for mortgage for different purposes:

Borrowing against for your own property

  1. Original title-deed/ certificate of lease
  2. Rates clearance certificate
  3. Land rent clearance certificate
  4. Rental schedule for income properties

Borrowing to buy a house or land

  1. Copy of title deed/ certificate of lease
  2. Rates clearance certificate
  3. Letter of offer/sale agreement
  4. Land rent clearance certificate

Borrowing to construct/develop

  1. Original title deed/ certificate of lease
  2. Rates clearance certificate
  3. Land rent clearance certificate
  4. Approved drawings
  5. Bill of quantities
  6. Project proposal giving feasibility analysis and cash flow projections in case of investment property

Borrowing to buy from a developer

  1. Letter of offer from the developer
  2. The developer to furnish the bank with the following:
  3. Completion certificate
  4. Title deed/lease certificate
  5. Insurance certificate
  6. Approved drawings

Armed with this information, and having done your homework well enough you can go ahead and get a mortgage that will make your home ownership plans to work.

The writer is a Registered Valuer, Author and Lead Investment Consultant at