Financing Options in Kenya

In Kenya, real estate investors and homebuyers have various financing options to suit different needs, whether you’re looking to buy a home, develop property, or invest in real estate projects. Below are some of the main options:

1. Mortgage Loans

Commercial Banks

Many banks in Kenya—such as KCB, Co-operative Bank, and Equity Bank—offer mortgage loans for residential properties. These loans typically cover up to 80% of the property’s value, requiring the buyer to pay the remaining 20% as a deposit.

Sacco Loans

Savings and Credit Cooperatives (Saccos), like Mwalimu National Sacco or Kenya Police Sacco, have become an increasingly popular choice. They often provide lower interest rates (sometimes below 10%) and more flexible repayment terms than traditional banks. Eligibility usually depends on a member’s savings history and duration of membership.

2. Cash Installment from Developers

Some real estate developers offer direct financing options, especially for off-plan purchases. In this scenario, the buyer commits to purchasing the property before it is built, with payments spread out over a few years.

·      Often, an initial down payment of 10–20% is required.

·      The balance is then paid over a set period—anywhere from 2 to 5 years—or until the property’s completion.

·      These arrangements may come with favorable terms, including zero or low interest rates, compared to conventional bank loans.

3. Cash Purchase

A cash purchase involves buying a property outright without any mortgage or loan. In Kenya, this is a common method for those with sufficient funds. In most cases, paying cash can secure a discount on the listed price.