Mortgage quote in Kenya: 5.23% fixed for 3 years?

[nia.voss]

I’m comparing mortgage quotes for a Nairobi property purchase around KES 113,500,000. The headline offer is 5.23% fixed for 3 years, but the advertised rate looked lower until the arrangement fee and loan-to-value tier were applied.

One quote has a painful fee but much better overpayment terms. For a fair comparison, would you focus on APR, interest paid during the fixed period, or total cash cost including fees? I’m also trying to put a sensible value on portability and early repayment flexibility.

 

[tradeTheChart]

For a three-year decision, I would compare total cash paid over those three years plus the loan balance remaining at the end. Include every upfront or financed fee. APR can still be a useful cross-check, but it may not reflect your likely exit point if you expect to refinance when the fixed period ends.

 

[EvenPebble]

What loan-to-value tier are you actually in, and is the arrangement fee payable upfront or added to the mortgage? If it is financed, you are paying interest on it as well. I’d also ask each lender for the same loan amount and repayment schedule; otherwise the monthly figures can look comparable while the remaining balances differ.

 

[zia_titles]

I wouldn’t automatically treat refinancing after three years as the base case. A new loan may not be available on equally attractive terms, and the property valuation or your circumstances could change. Test whether the monthly payment remains affordable after the fixed period under a few higher-rate assumptions. Flexibility is valuable, but not if the initial fee leaves you materially worse off.

 

[readTheBench]

The overpayment terms matter most if you genuinely expect spare cash during the fixed period. Estimate a realistic overpayment amount, then ask both lenders for illustrations using that pattern. Also get the portability wording clarified: whether it is conditional on fresh approval, what happens if the next property costs more or less, and whether any early-repayment charge still applies.

 

[EvenPebble]

Joanap’s comparison is the cleanest starting point, with Mateo’s caveat added. I’d build two versions: one where the mortgage is refinanced after 3 years and another where it continues at the lender’s reset rate. Then compare fees, monthly affordability, cumulative payments and the balance outstanding. That should reveal whether the expensive quote’s overpayment flexibility has real value or is merely attractive wording.