Owning a home is everyone’s dream. But it comes at a cost. Compared to other real estate financing options, mortgages remain the common way to purchase a home globally, but for the longest time, this product has mainly been focusing on individuals earning huge salaries.
With the highest number of the working population belonging to the middle class, many Kenyans are therefore locked out of the mortgage market due to low-income levels. Luckily, affordability is no longer an issue, thanks to the Co-operative Bank of Kenya.
In early June, Co-op Bank Kenya launched a mortgage product for those who are working and contributing to a pension scheme in partnership with Enwealth.
This means that you don’t have to earn a huge salary to get yourself a mortgage from Co-op Bank. You can get a pension-backed mortgage easily and shop for a home while staying focused on your retirement dream.
This new product by Co-op and Enwealth Kenya is a lifesaver, especially in a country with a fast-moving housing market.
The mortgage product was made possible by the government’s Retirement Benefits (Mortgage Loans) Act, Regulations Amendment 2020 that allows members of pension schemes to utilize up to 40 percent of their accrued pension benefits as down-payment to buy a home.
This means that if you are among the over three million members of pension schemes in Kenya, you can now easily buy a home without much of a hassle.
Thanks to Co-op Bank and Enwealth, you can now purchase a developed property anywhere in Kenya with a ready title deed or certificate of the lease, provided that the house is a residential property for the member’s occupation.
The application can be done by an individual pension scheme member or jointly with a spouse thereby consolidating their pension benefits to access a higher amount.
The mortgage product features an extended repayment period of up to 20 years, subject to the retirement age of the borrower.
If you are exploring your options and wondering whether a mortgage as a middle-income earner is viable, you can give it a try.
If you still have questions, contact Co-op Bank and one of their advisers will be happy to give you some answers and help you find the right mortgage solution.
Read More: Co-op Bank And Enwealth Launch Kenya’s First Pension-Backed Mortgage