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bwenyenye
#11 Posted : Wednesday, December 14, 2011 4:21:14 PM
Rank: Elder

Joined: 5/24/2007
Posts: 1,805
Gordon Gekko wrote:
bwenyenye wrote:
Its not gonna work guys. The mortgage rates have to come down to about 15% or else the banks will collapse due to defaults. You cannot peg a long term debt to a short term T bill rate. Surely, you cannot compare 3 months with 15 years.... Something got to give.

Watch the publications of banks from Dec to June next year and you will realise why the big guns are selling banks off


By my knowledge (maybe limited) HF, the biggest lender has 16,000 mortgages. Let us assume all the other lenders hold a combined total of 50,000. Even if all 66,000 mortgages defaulted, is that enough to bring the banking sector down?


Boss. The total number of mortgages given by Kenyan Banks is about 16,000. Those can be said to be spread largely between HF and S&L. I am not talking about the entire banking sector collapsing , but the mortgage business. Also realize that mortgages are rated the most secure lending to individuals that a bank can make. Even its risk weighting is half the other lendings. This implies that it should be the last to collapse i.e borrowers will first default on unsecured loans and commercial loans before letting their homes go.The collapse of the mortgage business will therefore signal a failure of the banking system as a whole.
I Think Therefore I Am
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lexbengo
#12 Posted : Wednesday, December 14, 2011 5:52:20 PM
Rank: New-farer

Joined: 9/7/2011
Posts: 26
Am just scratching my head, if the interest rate for new borrowers is at 23%, what about the insurance you pay on the mortgage loan! the total figure one pays must be bizarre.
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sparkly
#13 Posted : Wednesday, December 14, 2011 7:11:11 PM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
Abby wrote:
I was given a document which I have in my house; very true - it comes to 23M.

Visit them. We are talking about 24% p.a interest.

For your information, at 24% on 5M, the first month interest should be: 100,000/= (interest only). So, it is true.


Buy cash or take a SACCO loan and build Pole pole. that credit is too expensive Bwana!
Life is short. Live passionately.
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Gordon Gekko
#14 Posted : Wednesday, December 14, 2011 8:00:59 PM
Rank: Elder

Joined: 5/27/2008
Posts: 3,760
@bwenyenye, I'm sorry I fail to get your point. Mara the banking sector is collapsing, mara it's only the mortgage sector that is collapsing, mara mortgages are the lowest risk loans (meaning that even the mortgage sector collapsing is a remote possibility)Pray

@Abby, true the first month interest is 100k, meaning the loan will never end with a repayment of 97k .The mortgage calculator shows a repayment of 103k, this will service the principal at 2.9k in the first month.

This interest regime is a short term phenomena which will pass. People, mortgages are good loans, as they secure an appreciating asset. Just hold back your buying decision until the storm passes.
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  | | Edit by user: Thursday, December 15, 2011 7:29 AM | Reason: Not specified
QW25081985
#15 Posted : Wednesday, December 14, 2011 8:07:37 PM
Rank: User

Joined: 8/29/2011
Posts: 1,045
Location: Mtaani
is there anyway we could make money with this high interest rates before they go away ?
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GGK
#16 Posted : Wednesday, December 14, 2011 8:36:49 PM
Rank: Member

Joined: 11/21/2006
Posts: 608
Location: Ruiru
QW25081985 wrote:
is there anyway we could make money with this high interest rates before they go away ?


From HFCK website, the calculator for 5M @24% for 20 years gives an EMI of 100,870.41 which will yield total payment of 24,208,898.4

If inflation stays at 20% (God forbids) then @Abby is not being robbed.

@QW only if you are an Auctioneer.



"..I am because we are. "― Ubuntu, Umtu,
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mzeekijana
#17 Posted : Wednesday, December 14, 2011 9:00:03 PM
Rank: Member

Joined: 11/12/2010
Posts: 111
Location: MOMBASA
QW25081985 wrote:
is there anyway we could make money with this high interest rates before they go away ?

QW Tuko pamoja.....niko na 6M kwa mfuko ...I need a bank that can give me a return hata kama ni 15% ..ni wapi huko? In the place I am one can get a loan at a rate of 5% si unaona vile nita make money...Buy loan hapa and plant them huko nyumbani...Wazee tell me which bank is offering cool rates??
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youcan'tstopusnow
#18 Posted : Wednesday, December 14, 2011 9:26:03 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
mzeekijana wrote:
QW25081985 wrote:
is there anyway we could make money with this high interest rates before they go away ?

QW Tuko pamoja.....niko na 6M kwa mfuko ...I need a bank that can give me a return hata kama ni 15% ..ni wapi huko? In the place I am one can get a loan at a rate of 5% si unaona vile nita make money...Buy loan hapa and plant them huko nyumbani...Wazee tell me which bank is offering cool rates??

Which bank, you ask, offers these 'cool' rates? Why, the Central Bank. 20 percent even...
GOD BLESS YOUR LIFE
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mzeekijana
#19 Posted : Wednesday, December 14, 2011 9:31:47 PM
Rank: Member

Joined: 11/12/2010
Posts: 111
Location: MOMBASA
[quote=youcan'tstopusnowWhich bank, you ask, offers these 'cool' rates? Why, the Central Bank. 20 percent even...[/quote]

kwani how do i invest with central bank??
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youcan'tstopusnow
#20 Posted : Wednesday, December 14, 2011 10:04:35 PM
Rank: Chief

Joined: 3/24/2010
Posts: 6,779
Location: Black Africa
mzeekijana wrote:
youcan'tstopusnow wrote:
Which bank, you ask, offers these 'cool' rates? Why, the Central Bank. 20 percent even...


kwani how do i invest with central bank??

http://www.pesatu.blogsp...for-dummies-you-are.html
GOD BLESS YOUR LIFE
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  | | Edit by user: Wednesday, December 14, 2011 10:07 PM | Reason: Not specified
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