News Column

Barclays Sets a Part-Fixed Rate to Woo Homebuyers

May 7, 2014

Richard Mungai

Barclays Bank is betting on pacts with homebuilders to grow its share of the mortgage market by financing buyers with part-fixed rates for the first three years.

The top-tier lender said it has entered into agreements with four developments in Nairobi and Mombasa, and has simplified the mortgage application process such that homebuyers just need "to demonstrate consistent income and ability to repay the loan".

"Even with the relatively low mortgage penetration rates in the country, I believe the sector is quickly seeking solutions that cater to the emerging middle class segment," managing director Jeremy Awori said.

"Apart from getting into partnerships with developers, last year we rolled out a fixed rate mortgage product featuring a 15.9 per cent fixed interest rate allowing our customers to enjoy fixed rate monthly repayments for the first three years of the mortgage term."

Presently, the lender is offering a floating rate of 14.9 per cent for walk-in mortgage customers, according to the first quarter mortgage report by HassConsult and The Mortgage Company.

The ranking places Barclays at third lowest rate out of 15 banks surveyed after it reduced the mortgage rate by a percentage point in the last quarter.

Rival top-tier lenders StanChart and KCB are rated first and second in the mortgage ranking with 13.9 per cent and 14.5 per cent respectively.

HassConsult and TMC said expensive mortgages are starting to distort the property market as more potential buyers are locked out.

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Source: AllAfrica

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