5 floors with 8 units each @25m really?

@ hindi ni riu;
Am darn certain the bank will levy a "penalty" for early repayment of the mortgage, say you land into some cash

Great discussion guys!
Just why are mortgages so expensive in Kenya? I borrowed 4.8M for a 9.2M house in Nairobi (now worth 13M after 3 yrs)and the best HF could offer was 12.5% p.a. Call me naive but this is way close to what salaried people get for unsecured loans.
Is the 'risk' of default really reflected in the interest rate? HF are keeping the property deed legally charged to them and they can flog the house within 30 days in case of default. Some banker please school me.
Back to the Barclays Home Loan - the banks prefer very long term (secured) loans so their interest income is maximised. They asked me to pay mine over 18 yrs which meant 7.5M interest. I worked out that paying them within 7 yrs would cost 2.5M in interest instead. The whole idea of paying lower installments is great business for the bank. It may suit you to take it now but check if they will allow you to 'up' the repayment rate when your income increases - some banks will penalize you!
Ultimately, the decision to go for a mortgage is very personal. Your family situation, career, age and income will strongly influence your path.


Bharti bank anyone?

@ gordon gekko. I used to think in the same inferior way untill a friend of mine did a dissertation on the same while pursuing his MBA. It included amortization tables for comparison btn banks and sacco's and I was convinced that the sacco's are much more expensive. Ask uaself why its so easy to get a sacco loan. Is it because they love u more than a bank? Ua guess is as good as ours!