Mortgages in Kenya: Everything You Need to Know in 2025

Introduction

Buying a home is a dream for many Kenyans, but very few can afford to pay the full price upfront. That’s where mortgages come in. A mortgage allows you to spread payments over many years while enjoying homeownership today. In 2025, Kenya’s mortgage market is evolving, with banks, SACCOs, and even fintech firms offering financing solutions.

How Mortgages Work in Kenya

A mortgage is simply a loan secured by the property you’re buying. You pay monthly installments that cover both the principal (amount borrowed) and interest. If you fail to repay, the lender can repossess the property.

In Kenya, mortgages are mainly offered by commercial banks like KCB, NCBA, Stanbic Bank, Absa, and housing-focused lenders such as Kenya Mortgage Refinance Company (KMRC), which was created to make mortgages more affordable.

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Mortgage Interest Rates in 2025

Interest rates remain one of the biggest hurdles for Kenyan homebuyers. As of 2025:

• Average mortgage interest rates range from 12% to 16% per annum.
• KMRC-backed mortgages are slightly lower, around 9%–10%, but usually limited to affordable housing schemes.
• Rates vary depending on your income, loan amount, and lender.

Always compare different banks before committing, as a 1% difference can translate into millions over time.

Requirements for Getting a Mortgage in Kenya

To qualify for a mortgage, most banks require:

• Proof of income (payslips, business records, or diaspora remittances).
• Good credit history.
• Down payment of at least 10%–20% of the property value.
• Property valuation and due diligence reports.
• For diaspora buyers, proof of earnings abroad and sometimes a local co-applicant.

👉 Check available Nairobi properties that qualify for mortgage financing

Types of Mortgages Available

1. Fixed-Rate Mortgage– Interest stays the same for the loan period. Predictable but often higher.
2. Variable-Rate Mortgage– Interest changes depending on market rates. Can be risky but cheaper if rates drop.
3. Reducing Balance Mortgage– Interest is calculated on the remaining principal, meaning payments reduce over time.
4. Offset Mortgages (emerging)– Links your savings to reduce interest payable.

Pros and Cons of Mortgages

✅ Pros:

• Makes homeownership possible without paying 100% upfront.
• Helps build long-term wealth through property.
• Flexible repayment terms (up to 25 years).

❌ Cons:

• High interest rates increase the total cost.
• Risk of repossession if you default.
• Long-term financial commitment.

Tips for Young Professionals & Diaspora Buyers

• Start small: Consider affordable housing before upgrading.
• Improve your credit score: Pay debts on time and keep financial records.
• Compare lenders: Don’t settle for the first offer.
• Diaspora investors: Appoint a trusted lawyer or Power of Attorney in Kenya.
• Work with trusted agents: Platforms like Realty Borishelp match you with mortgage-ready properties.

Conclusion

Mortgages in Kenya are becoming more accessible, especially with KMRC-backed affordable loans. While interest rates remain high, proper planning and professional guidance make mortgages a powerful tool for homeownership. Whether you’re a young professional starting out or a diaspora buyer investing back home, the key is preparation and choosing the right partner.

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 Table of Contents

1. Introduction
2. How Mortgages Work in Kenya
3. Mortgage Interest Rates in 2025
4. Requirements for Getting a Mortgage in Kenya
5. Types of Mortgages Available
6. Pros and Cons of Mortgages
7. Tips for Young Professionals & Diaspora Buyers
8. Conclusion
9. FAQs

 

FAQs

1. What is the average mortgage interest rate in Kenya in 2025?
   Between 12%–16%, with KMRC-backed loans offering around 9%–10%.
2. How much deposit do I need for a mortgage in Kenya?
   Most banks require 10%–20% of the property value.
3. Can foreigners and diaspora Kenyans access mortgages?
   Yes. Many banks offer diaspora mortgages, but proof of income abroad is required.
4. How long can I repay a mortgage in Kenya?
   Typical repayment periods are 15–25 years, depending on the lender.