For many Kenyans, the dream of owning a home has historically collided with the harsh reality of commercial lending rates, which frequently hover between 13% and 18%. These double-digit borrowing costs make long-term monthly amortisation prohibitive for middle-income households.
To bridge this structural gap, the National Treasury collaborated with the World Bank, the International Finance Corporation (IFC), and institutional lenders to establish the Kenya Mortgage Refinance Company (KMRC). By supplying fixed-rate, concessional liquidity to local banks and SACCOs, KMRC enables financial institutions to offer long-term mortgages of up to Ksh. 10.5 million at single-digit interest rates.
KMRC operates via licensed Primary Mortgage Lenders (PMLs), which include commercial banks, microfinance institutions, and regulated deposit-taking SACCOs. While KMRC supplies wholesale funds at roughly 5% p.a., retail lenders add an operational margin to offer end-user rates between 8.0% and 9.9% p.a.
Please note that exact pricing, appraisal fees, typically 1.0% to 1.5%, and eligibility vary slightly according to individual institutional credit policies.
To access a KMRC-refinanced mortgage, borrowers must satisfy regulatory and lender-specific guidelines:
A. Calculate your borrowing power under the one-third gross salary cap
Select a residential property or an unencumbered plot for construction valued within Ksh. 10.5 million. Confirm your income meets the monthly repayment threshold. For instance, borrowing Ksh. 8 million at 8.99% p.a. over 25 years requires approximately Ksh.…
