The cost of buying or constructing property has over the years hindered many Kenyans from living in their dream homes, with the high upfront cost of land, construction and completed houses putting homeownership beyond the reach of many households.
This is a reality that has seen many individuals turn to mortgages to make their homeownership journey simpler.
According to financial experts, access to mortgage financing allows buyers to spread the cost of a home over a longer period rather than having to raise the full purchase price at once.
A mortgage can also give prospective homeowners greater flexibility in how they acquire property. Depending on the facility, financing can be used to purchase a completed house, buy land and construct a home, or develop a house on land the borrower already owns.
The Co-operative Bank of Kenya (Co-op Bank) is one of the lenders hailed for its mortgage products which have helped many salaried and self employed Kenyans achieve their dreams of owning property.
In one of the products targeting salaried young Kenyans, the bank is offering eligible borrowers up to 100 percent financing of the cost of a residential property through a mortgage facility of up to Sh10.5 million.
The facility is offered under the Kenya Mortgage Refinance Company (KMRC) mortgage solution, at an interest rate of 9.5 per cent, with a repayment period of up to 25 years.
The financing can be used to buy a ready house, purchase land and construct a home, or build on land that is already owned by the borrower.
Evan Mwangi, Acting Head of Retail Mortgage at Co-op Bank, outlined the facility during a Co-op Bank Youth Forum focused on homeownership and mortgages for young people.
“With Co-op Bank, you can get 100 per cent financing to buy a ready house or buy land, and the bank finances the building or just construction under the KMRC mortgage solution,” Mwangi said.
The facility has a maximum property value of Sh15 million, while the maximum mortgage financing available is Sh10.5 million.
For young buyers looking for relatively lower-cost options, Mwangi said Co-op Bank has properties available at about Sh3.5 million. These include one-bedroom houses in Ongata Rongai and three-bedroom houses in Kisaju.
According to Mwangi, to qualify for the 100 percent financing, Co-op Bank assesses the borrower’s repayment ability through income, existing financial commitments, credit history, employment or income stability, and the value of the property.
“It doesn’t matter the salary; what matters is what you are willing to commit to towards repayment,” Mwangi explained.
He, however, advised young people to budget for additional expenses such as property valuation, legal fees, stamp duty, insurance and property transfer charges.
Also Read: Your mortgage was approved. So why don’t you have your home yet?
