In Kenya, as in other countries, a mortgage is a loan secured against property. In Kenya, mortgages are regulated by the Central Bank of Kenya.
Mortgages are popular because they allow people to buy property without having to pay the full price upfront. They also provide security for the lender, as the property can be repossessed if the borrower defaults on the loan.
The main types of mortgages in Kenya are fixed rate mortgages and variable rate mortgages.
Fixed rate mortgages have an interest rate that is fixed for the duration of the loan. This means that the monthly repayments will stay the same, even if interest rates rise.
Variable rate mortgages have an interest rate that can fluctuate over the course of the loan. This means that the monthly repayments can go up or down, depending on the interest rate.
When choosing a mortgage, it is important to compare the different interest rates and terms on offer. It is also important to consider the fees and charges that come with the loan.
The Central Bank of Kenya has put in place measures to protect borrowers. For example, lenders must offer borrowers a grace period of at least 30 days before they can start repossession proceedings.
If you are thinking of taking out a mortgage, it is important to get advice from a qualified financial advisor.