Employees earning not more than Sh150,000 per month in Kenya are now eligible to own a house and pay for 15 years at 9.9 per cent.
The Central Bank of Kenya puts the average mortgage rate in the country at 12.9 per cent, meaning the rate granted by the Co-operative Bank in partnership with the Kenya Mortgage Refinance Company (KMRC) is the least in the market.
The new low rate is expected to set the pace for the Saving and Credit Cooperative Organisations (Sacco) movement in the country which has found low-hanging fruits in funding affordable housing in the country.
The Affordable mortgage has been made possible by an Sh549 million initial disbursement from the KMRC which Co-op Bank will top-up with counterpart funding to create a significant kitty for on-lending to customers.
According to Co-op Bank, the product was crafted after many months of negotiations and consultations with key housing stakeholders including proper developers and micro-credit agencies.
“To ensure that the affordable mortgage benefits the intended users, only those Kenyans earning not more than Sh150,000 a month are eligible, with the maximum loan amount capped at Sh6 million,” the two firms said in a joint press statement.
The two firms termed the move as the first major attempt at making mortgages available to the majority and maybe a game-changer towards realising the long-held goal of affordable housing in Kenya.
