NAIROBI, Kenya – A new study has revealed that the vast majority of Kenyans are priced out of the formal mortgage market, with only a small fraction earning enough to qualify for high-value home loans.
The joint research by Zamara, the Centre for Affordable Housing Finance in Africa (CAHF), and Financial Sector Deepening Kenya (FSD Kenya) found that just 6,146 out of 145,205 pension scheme members — about 4 per cent — can afford mortgages exceeding Sh10 million.
This affordability gap aligns with data from the Central Bank of Kenya (CBK), which shows that the average mortgage size has climbed to Sh9 million, up from Sh6.9 million in 2013 and Sh7.5 million in 2014.
The sharp increase has been attributed to rising property prices and high upfront fees, making it increasingly difficult for most Kenyans to own homes through formal financing.
“High interest rates, strict eligibility criteria, and low income levels push most households to rely on short-term, high-interest personal loans or informal financing, which are not ideal for long-term housing projects,” the report notes.
CBK figures indicate that a Sh9 million mortgage repaid over 11 years at 14.9 per cent interest requires monthly instalments of at least Sh140,000. To qualify, borrowers need to earn over Sh420,000 per month, yet more than 85 per cent of Kenyans earn below Sh100,000.
The banking sector has issued only 30,016 active mortgages, despite there being over 3.4 million formally employed Kenyans — underscoring the mismatch between incomes and property prices.
However, the study offers a glimmer of hope under the government’s Affordable Housing Programme (AHP).
It notes that nearly a quarter of respondents could afford a Sh3 million home with a 25-year repayment term at 9.5 per cent interest through the Kenya Mortgage Refinance Company (KMRC).
“Under the subsidised KMRC rate of 9.5 per cent, a household earning Sh100,000 per month can qualify for a mortgage of Sh3.4 million — enough to purchase a typical AHP unit,” the report adds.
Analysts say boosting access to affordable credit, expanding long-term financing options, and reducing construction costs remain key to narrowing Kenya’s home ownership gap.
