Kenya Mortgage Refinance Company (KMRC) has partnered with Cooperative bank to offers mortgages at the rate of 9.9 percent. This rate is the least in the market given that the Central Bank of Kenya puts the average mortgage rate in the country at 12.9 percent.
Employees earning not more than Kshs 150,000 per month in Kenya are now eligible to own a house and pay for 15 years at 9.9 percent.
The new low rate is expected to set the pace for the Saving and Credit Cooperative Organizations (Sacco) movement in the country which has found low-hanging fruits in funding affordable housing in the country.
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The Affordable mortgage has been made possible by Kshs 549 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.
The product was crafted after many months of negotiations and consultations with key housing stakeholders including property developers and micro-credit agencies.
The two firms termed the move as the first major attempt at making mortgages available to the majority and maybe a game-changer towards realizing the long-held goal of affordable housing in Kenya.
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Financing solutions will be made available to landlords, contractors and developers to facilitate a coordinated sector-wide response towards the provision of affordable housing as long-desired by many households in Kenya.
The deal is coming barely two months after Mwalimu Sacco unveiled a plan that will see members access a minimum mortgage of Kshs 500,000 and a maximum loan of Kshs 8 million to build houses.
