Comparing a 5.91% mortgage quote in Nairobi once fees are included

R

round_workshop

Property investor
Established
I have a mortgage quote for a Nairobi property purchase around KES 36,760,000: 5.91% fixed for 15 years. The advertised rate initially looked better than competing offers, but the arrangement fees and loan-to-value tier narrow the difference.

What figure would you use to compare lenders: APR, interest over the fixed period, or total cash paid including fees? I am also checking early-repayment charges and whether the loan is portable if I move.
 
Choose the comparison period first. Otherwise the cheapest-looking option may depend entirely on an assumed refinance or early exit.

For each quote, list the deposit, fees, monthly payments and any repayment charge up to the date you could realistically move or refinance. Then run a second column through the full 15 years. APR can help narrow the field, but the cash totals will show which lender suits each scenario. I would also confirm whether 5.91% is fixed for the whole term and whether any fee is added to the KES 36,760,000 balance.
 
One missing detail: is 15 years the full loan term, or merely the period for which 5.91% is fixed? Also, are arrangement fees paid in cash or added to the balance? Financing the fee means it affects both the starting balance and the interest calculation.
 
I would not build the comparison around an assumed refinance unless you have a strong reason to expect one. Future rates and loan-to-value tiers are unknown. First test whether the monthly payment remains comfortable from ordinary income, then treat any refinancing benefit as upside rather than something required to make the purchase affordable.
 
The 15 years is the full quoted term, so there is no later rate reset within this particular offer. The arrangement fee can be paid upfront or added to the loan; I was leaning toward adding it, but the point about paying interest on it has made me reconsider. I will ask each lender for figures based on the same deposit and the same assumed repayment date.
 
That makes the comparison cleaner. Ask for two versions from each lender: one assuming you hold the mortgage for all 15 years, and another assuming an earlier sale or full repayment at a date that is plausible for you. Include fees in both. Portability should be assessed separately because it may depend on the future property and lender approval, not just whether the contract uses the word “portable.”
 
Also stress-test cash flow rather than looking only at the quoted monthly instalment. Upfront fees preserve a lower loan balance but consume cash that might otherwise cover purchase costs or emergencies. Adding them protects cash now but raises the financed amount. The better choice depends on which constraint is tighter, not simply which option shows the lowest total interest.
 
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