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Rank: Member Joined: 3/7/2011 Posts: 112
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Hi Gentelemen,
Over the weekend, I met officials of Housing Finance in Kitengela where they have opened a shop.
They showed me their mortage rates, current ones. A shocker: you borrow 5M at 97k monthly for 20 years, yet that house can only fetch 20k monthly rent.
Is mortage loan under these conditions of any use really! We are in tough times.
Regards
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Rank: Chief Joined: 1/13/2011 Posts: 5,964
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Rank: Veteran Joined: 11/2/2006 Posts: 1,206 Location: Nairobi
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Please confirm.. 97k*12months*20yrs=23M. Formally employed people often live their employers' dream & forget about their own.
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Rank: Elder Joined: 3/29/2011 Posts: 2,242
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@ Abby, Unless the agent wanted to rob you, it is incomprehensible how one can pay 97k/month for 20 yrs on a 5 M loan. It seems not to add up. "Things that matter most must never be at the mercy of things that matter least." Goethe
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Rank: Member Joined: 3/7/2011 Posts: 112
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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.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Old clients pay 16.2% new ones pay 23%...3 month T-Bill is at 20% what do you expect? When dividend yields are higher than rental yields..what do you still want and go do in real estate..come to the stock market..... 
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Rank: Veteran Joined: 3/25/2010 Posts: 939 Location: Nai
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things are thick and you haven't yet seen the kind of house you will get @ 5M you will keep asking where your money went. L
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Rank: Elder Joined: 5/24/2007 Posts: 1,805
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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 I Think Therefore I Am
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Rank: Elder Joined: 5/24/2007 Posts: 1,805
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Well, then after I have financed a 20 flat building in Eastlands with a loan whose rate has tripled, some idiot decides that any tenant paying less than 25K should be under the rent tribunal i.e I cannot increase rents without begging someone who has no idea how i built the property.... I foresee chaos in the industry and a hike of rents to above 25K if only to keep off the rent tribunal fellows. ( anyone saw how they were duped by Marshalls against the Chinese?) I Think Therefore I Am
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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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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?
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Rank: Elder Joined: 5/24/2007 Posts: 1,805
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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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Rank: New-farer Joined: 9/7/2011 Posts: 26
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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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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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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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Rank: Elder Joined: 5/27/2008 Posts: 3,760
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@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)  @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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Rank: User Joined: 8/29/2011 Posts: 1,045 Location: Mtaani
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is there anyway we could make money with this high interest rates before they go away ?
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Rank: Member Joined: 11/21/2006 Posts: 608 Location: Ruiru
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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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Rank: Member Joined: 11/12/2010 Posts: 111 Location: MOMBASA
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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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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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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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Rank: Member Joined: 11/12/2010 Posts: 111 Location: MOMBASA
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[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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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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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.htmlGOD BLESS YOUR LIFE
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