Key Takeaways
- KMRC Rates: Access fixed 9% interest rates, bypassing the 16% bank volatility.
- Boma Yangu Savings: Regular GHS (Global Housing Scheme) savings are the only way to “jump the queue” for allocation.
- Sacco Power: Saccos have emerged as the primary lenders for middle-class mortgages in Kenya.
- Retirement Utility: You can now use up to 40% of your NSSF savings for a home down payment or mortgage security.
- TPS Model: Tenant Purchase Schemes offer a path to ownership through monthly “rent” payments over 20-25 years.
Introduction
Inflation and global economic shifts have kept commercial bank interest rates between 14% and 18% through 2025. However, the Kenya Mortgage Refinance Company (KMRC) has created a “safe haven” for Kenyan homebuyers. In 2026, the smart money is moving away from traditional bank debt and toward KMRC-backed Sacco loans and the Boma Yangu affordable housing scheme. This dual approach has democratized access to homeownership for thousands who were previously priced out of the market.
The KMRC Anchor: Fixed Rates for the Middle Class
The Kenya Mortgage Refinance Company does not lend directly to the public but provides low-interest capital to Saccos and banks. In 2026, Saccos have become the primary mortgage lenders. By using KMRC funding, they offer fixed interest rates between 8.9% and 9.5%. These rates are fixed for the life of the loan (up to 25 years), providing predictability that commercial banks cannot match.
Understanding the Boma Yangu “Allocation”
The Affordable Housing Program (AHP) has moved from construction to a massive allocation phase. To get a unit in projects like Park Road or the newer Mavoko developments, applicants must follow a digital workflow via the Boma Yangu portal or the *832# USSD.
The 10% Deposit and GHS Advantage
You cannot be allocated a house without a 10% deposit, though you can save this gradually. A critical strategy in 2026 is contributing to the Global Housing Scheme (GHS); those who contribute voluntarily get priority in the lottery system, effectively allowing them to “jump the queue.”
The NSSF 40% Rule: Unlocking Retirement Savings
A major policy win in 2026 is the implementation of the revised NSSF Act. Homebuyers are now allowed to utilize up to 40% of their accrued retirement benefits to secure a mortgage or as a down payment. This has solved the “deposit gap” for many employees who have the income for monthly payments but lack the upfront cash.
The Rise of Tenant Purchase Schemes (TPS)
For many, even a 9% mortgage is a stretch. The Tenant Purchase Scheme (TPS) has become the “Gold Standard” for 2026. Under TPS, you move into the house and your monthly payment roughly the same as market rent is split between rent and equity. After 20 to 25 years, you own the house outright without ever having signed a formal bank loan document.
Comparative Analysis: Commercial Banks vs. KMRC/Saccos
In 2026, the financing choice is a trade-off between speed and long-term cost.
Commercial Bank Mortgages are best for high-end properties that fall outside the KMRC value cap. They offer higher loan amounts and quicker processing for high-income individuals, but they carry the risk of variable interest rates.
KMRC-Backed Sacco Loans are the preferred choice for homes valued up to KSh 10.5 million. They offer much lower, fixed interest rates but are restricted to those who meet specific income and property value caps.
Comparison Table: Financing Methods
| Feature | Standard Bank Mortgage | KMRC-Backed Loan (via Sacco) |
| Interest Rate | 15% – 17% (Variable) | 8.9% – 9.5% (Fixed) |
| Maximum Term | 15 – 20 Years | 25 Years |
| Income Cap | None | Usually for those earning <KSh 150k |
| Approval Time | 3 – 6 Months | 1 – 2 Months (for Sacco members) |
FAQs
Can I use my NSSF savings to buy a house in 2026?
Yes, under the revised NSSF Act, you can utilize up to 40% of your accrued retirement benefits to secure a mortgage or as a down payment.
What is the maximum house price for a KMRC loan?
In 2026, KMRC typically refinances loans for properties valued up to KSh 10.5 million.
Can diaspora Kenyans apply for Boma Yangu?
Yes, there is a dedicated “Home Applicants Diaspora” category on the portal.
Is the interest rate on a Sacco mortgage fixed?
Yes, KMRC-backed loans are typically fixed-rate, providing protection against market volatility.
How do I qualify for a TPS?
Most TPS units are offered through government-led projects or specific private developers; you apply and undergo an assessment similar to a rental application but with a focus on long-term payment ability.
