Kenyans to start getting home loans at seven per cent interest

Mortgage Rate in Kenya: Kenyans who earn Sh. 150,000 and below per month will start getting home loans at a discounted annual rate of seven percent.

These loans have been subsidized by the newly founded Kenya Mortgage Refinance Company (KMRC). KMRC offers loans to banks and saccos for onward lending. It is backed by the government through the National Treasury. In this instance, banks and saccos will take the money from KMRC at a rate of five percent. They will then onward lend at a rate of seven per cent. 

This will be low by close to five percent. The current rates in the market stand at rate of 11.95 percent. According to the KMRC chief executive officer Johnstone Oltetia, the funds will start getting disbursed from September. 

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According to a related report that appeared in a local daily, KMRC has “so far mobilized nearly Sh. 40 billion, including Sh. 2.2 billion in equity capital, Sh. 25 billion committed by the World Bank and Sh. 10 billion from African Development Bank. It has plans to raise an extra Sh. 5 billion from the capital markets.”

While loans from KMRC are bound to offer relief to aspiring home owners in the lower earning cadres, Kenyans who earn Sh. 150,000 and above will however continue to take mortgage loans at the current market mortgage rate in Kenya.