How Mortgages Work in Kenya and the One Thing No One Tells You Before You Apply

Thinking of buying a home? Learn how mortgages work in Kenya, real costs, and the one thing banks never tell first-time buyers.

When the Dream Meets Reality

When Sarah decided it was finally time to stop paying rent and own a home, she imagined it would be a straight path: find a nice house, walk into a bank, and get the keys after a few signatures.

But reality hit differently.

Getting a mortgage in Kenya today with rising cost of living, unpredictable interest rates, and tighter lending rules is no walk in Uhuru Park. Between comparing bank offers, decoding financial jargon, and gathering endless paperwork, the dream of homeownership can start to feel more like a full-time job.

That’s where many Kenyans get stuck. Not because they can’t afford a mortgage but because they don’t know how the system really works, or how to navigate it smartly.

The truth is, understanding how mortgages work in Kenya can save you time, money, and unnecessary stress . And in this guide, we’ll break it down simply from how banks decide who qualifies, to the smartest way to secure a home loan through trusted partners like I&M Bank.

1. What Exactly Is a Mortgage?

A mortgage is a long-term loan you take to buy property, with the home itself acting as security. In simpler terms, the bank helps you buy your house, and you pay them back in small monthly installments over several years.

In Kenya, most mortgages come from commercial banks like I&M , KCB , NCBA , and a few SACCOs . The Kenya Mortgage Refinance Company (KMRC) also plays a big role by offering affordable refinancing to keep rates stable.

2. How the Mortgage Process Works in Kenya

Let’s break down the process step-by-step because this is where most people lose track:

Step 1: Pre-qualification

Before you even apply, lenders want to know: Can you afford it? They’ll check your income, job stability, credit score, and debt-to-income ratio. Tip: Aim to have less than 40% of your monthly income going to debt repayments.

Step 2: Application

You’ll need documents like:

ID and KRA PIN
3–6 months’ bank statements
Payslips or proof of income
Sales agreement for the property

Each bank has different requirements, which is why working with a broker (like Roots Africa ) helps. We match you with the lender that fits your profile best, instead of you visiting five banks on your own.

Step 3: Approval & Valuation

Once you apply, the bank does a property valuation to ensure the home’s value matches the loan amount. This step prevents over-lending and protects both you and the bank.

Step 4: Legal Work & Disbursement

The bank’s lawyers prepare the mortgage documents. Once everything checks out, the funds are released to the property seller, and the house title is registered under your name with the bank holding it as collateral.

Step 5: Repayment

Now, you begin making monthly repayments, which include both principal (the loan amount) and interest . Most Kenyan mortgages run for 10 to 25 years , depending on your income and loan type.

3. Types of Mortgages in Kenya

a. Owner-Occupier Mortgage

You take this loan to buy a home you plan to live in.

b. Investment Mortgage

If you plan to buy a property you plan to rent out, the rental income can help you repay the loan.

c. Construction Mortgage

Perfect for people building in phases. The bank releases funds in stages as the project progresses.

4. Fixed vs. Variable Interest Rates

Fixed Rate: The interest rate stays the same for the entire loan period. You’ll always know what to pay each month — great for stability.
Variable Rate: The interest rate changes depending on market conditions. When the Central Bank adjusts its base rate, your repayment might rise or fall.

Smart Tip: In uncertain times (like 2025’s rising inflation), fixed rates give peace of mind.

5. Common Mortgage Mistakes Kenyans Make

Focusing only on interest rates — forgetting about processing fees, legal costs, and insurance.
Applying before cleaning up your credit report — even small unpaid mobile loans can hurt your chances.
Not comparing lenders — every bank has its own conditions and hidden costs.
Relying only on friends’ experiences — your financial profile is unique.
Not getting professional guidance — a mortgage broker can literally save you hundreds of thousands over time.

6. The Smart Way: Work With a Trusted Mortgage Broker

This is the part most people don’t know — and it’s the one thing no one tells you before you apply .

A mortgage broker like Roots Africa bridges the gap between you and the banks. Instead of walking from one bank to another trying to compare rates, a broker:

Analyzes your financial profile
Matches you with the most suitable lender (like I&M Bank)
Negotiates better rates and terms
Handles the paperwork and communication for you

And here’s the best part: you don’t pay us directly.

We earn a commission from the bank once your mortgage is successfully approved. That means our success depends entirely on your success.

Final Thoughts

Owning a home in Kenya may feel out of reach, but with the right guidance, it’s absolutely possible. You don’t need to have millions in cash; you just need clarity, preparation, and the right partner on your side.

At Roots Africa , we’ve helped dozens of Kenyans like Sarah navigate the mortgage process from understanding eligibility to securing affordable loans with trusted partners like I&M Bank .

Ready to find out how much you can qualify for?

Get your free mortgage readiness consultation today. No hidden fees, no pressure, just honest advice from people who’ve been there.