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Development Bank of Kenya to offer mortgage loans at 8.5 per cent for apartments development in in Mlolongo, off Mombasa Road

Development Bank of Kenya

Development Bank of Kenya

Majority state-owned bank, the Development Bank of Kenya, is to offer mortgage loans to buyers of apartments at a development in Machakos county at 8.5 per cent.

This is the lowest mortgage rate for walk-in customers in the market yet, beaming a fresh ray of hope to aspiring homebuyers on home loans affordability.

The quasi-public bank will finance buyers of Phase II of Great Wall Apartments in Mlolongo, off Mombasa Road, at 8.5 per cent for up to 25 years. The rate is however exclusive to this development, according to DBK’s customer care desk.

“The rate will be applicable to these apartments for the time they will be available. We normally do offer mortgage loans… but at our base rate of 19 per cent,” a customer care officer said on phone.

Homebuyers outside of the particular development seeking financing from DBK will thus have to contend with the higher end base rate of 19 per cent, with the effective rate likely to be higher when other fees are added.

The state owns 89.3 per cent of the bank through the Industrial and Commercial Development Corporation (ICDC) and the remaining 10.7 per cent are held by the NSE-listed TransCentury Ltd.

Great Wall Apartments are built by Chinese real estate company Erdemann Property Ltd, which said it has completed phases I and III. The second phase will comprise 384 three-bedroom units. The developer broke ground for the new phase yesterday.

The units are on offer for Sh6 million to mortgage buyers, and Sh4 million to cash buyers whose window of opportunity runs from October 10 to December 24.

A quarterly mortgage report by real estate consultancy HassConsult and The Mortgage Company (TMC) showed the average rate for home loans was 16.45 per cent in the quarter to June 30. StanChart introduced a 45-day offer of 12.9 per cent, the lowest in the period.

Of the 16 ranked mortgage lenders, another state-owned bank, Consolidated Bank, and the Aga Khan-owned Diamond Trust Bank were the most expensive at 19 per cent, unchanged from the previous quarter.

Homebuyers usually pay additional costs of valuation, stamp duty and legal services, which may amount up to five per cent of the property value, according to stand-alone mortgage lender Housing Finance. The lender recently introduced a 105 per cent financing home loan to cater for the deposit and additional fees.

– The Star

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