We all have plans in life, and one of the common plans most people have is owning a home. Of course, a home is an essential asset that everyone should have.
It doesn’t matter whether you want a fully constructed house or you want to cement it yourself. Some people prefer ready-made houses because it’s easier to buy a house than construct one.
However, constructing a house is by far the best option, as you will get a chance to choose the material you want and the design of your choice.
While you may have all the best house designs on earth and the best place to construct, money it’s the only thing that will actualize your home ownership dream.
For the longest time, many people have been locked out of owning homes due to lack of money. Luckily, affordability is no longer an issue, thanks to the Co-operative Bank of Kenya.
The bank recently announced a mortgage plan aimed at availing affordable housing to people who earn less than Sh. 150,000 per month. The new move by Co-Op Bank is a lifesaver and defies the old trend where many Kenyans were locked out of the mortgage market due to low-income levels.
The beauty of the new Co-Op bank’s mortgage plan is that it is 3 percent points cheaper than the average mortgage rate of 12.9 percent estimated by the Central Bank of Kenya.
To be eligible for this plan, aspiring customers will need to have a maximum household gross income of Sh. 150,000. They will also need to have at least six months of consistent banking with Co-Op Bank.
Aspiring homeowners will have the option of either purchasing a ready residential house or buying a plot and constructing. The purchased or constructed property will be the security for the loan, with the loan’s interest rate capped at 9.9 percent per annum on reducing the balance.
The loan is open to both employed and self-employed individuals. The maximum loan tenure for employed applicants is 15 years and 10 years for self-employed individuals.
For the properties around the Nairobi Metropolitan area, the bank will provide loans of between Sh. 500,000 and 6 million, and loans of up to 5 million for properties outside Nairobi.
Interestingly, top-up loans will be allowable under commercial rate and upon repayment of the primary loan for a period of at least 12 months.
If you are weighing your options and wondering whether a mortgage as a middle-income earner is viable, you can give it a try.
You can also contact Co-op Bank, and one of their advisers will be happy to give you some answers and help you find the right mortgage solution.