Market Potential vs. Utilization

  • The Kenyan home loan market is estimated at over Sh800 billion, but only Sh164 billion has been utilized, indicating untapped opportunities.

 Changing Trends

  • A rising number of individuals are turning to banks for mortgages, especially in the low- and medium-income segments, suggesting potential growth in the sector.

Perceptions Impacting Uptake

  • George Laboso, head of home loans at Barclays Bank, notes that certain beliefs and perceptions have slowed mortgage financing uptake.

 Economic Influence

  • Mortgage uptake is linked to economic conditions; a thriving economy encourages borrowing, while economic challenges may deter potential borrowers.5. Factors Affecting Lending Rates
  • Various factors influence mortgage lending rates, including asset costs, operational expenses, risk, profit margins, inflation, and currency fluctuations.

Challenge in Financing

  • One major challenge for mortgage lenders is using short-term liabilities to finance long-term assets, emphasizing the need for long-term funds and a secondary market for mortgage-backed securities.

 Cost Misconceptions

  • Contrary to misconceptions, home loan financing is not inherently costlier than construction loans. The pricing is similar; the key difference lies in the initial capital required for construction loans.

Mortgage Repayment

  • Debunks the myth that mortgages are exclusively long-term, emphasizing that borrowers can accelerate repayment, with many clearing their mortgages within seven years.

Accessibility for All

  • Dispels the notion that home loans are only for the rich or those in standard employment, emphasizing that individuals with ordinary incomes, in formal or informal sectors, can access different payment packages.

Affordability and Incentives

  • Encourages individuals not to shy away from home loans, highlighting the availability of affordable properties and building materials. Employers and the government also offer incentives, such as mortgages at low interest rates.

Tax Relief Incentives

  • Highlights the fact that incentives, like mortgage interest tax relief, exist to benefit those with mortgages.

Navigating through these facts and dispelling myths can empower potential homebuyers to make informed decisions in Kenya’s evolving mortgage landscape.