Interest rates for mortgages have been on the downward trend even at a period when the base lending rate was at the 18% peak. This has been revealed at the release of the second quarter mortgage report by The Mortgage Company (TMC) in partnership with property development and management firm HassConsult.

"Even before the CBK rate cut last week, mortgage rates were trending downwards, as industry became more creative and more focused in making home ownership products accesible," said Caroline Kariuki The Mortgage Company Managing Director.

Citing an array of new products, including Standard Chartered mortgage takeover offer at 16.9%, non bank mortgages at 14% and CFC Stanbic's new fixed rate offer at 18%, Kariuki said the industry was running hard to explore alternative sources of finance and to acquire new mortgage customers.

The trend for low priced home loans received a boost when Micro finance institutions joined the market to give loans to low income earners and individuals in the informal sector. Rafiki Deposit Taking Micro-finance institution this month launched low cost mortgage of between Ksh 1 million and Ksh 3 million targeting low income earners and informal sector employees.

While CFC Stanbic's rate represented the lowest in the banked mortgage market , its floating rate at 24% came in as one of the most expensive packages alongside Equity Banks 24% rate with the average rate on the market trending at 22%. I&M Bank held the lead for the lowest mortgage pricing at the end of June with a floating rate of 18%. KCB brought the biggest downward shift on the market when it cut its rate from 24% to 19%.

"We hope to now see some further rapid interest rate adjustment downwards following the cut in the base lending rate from 18% to 16.5% by the MPC," said Kariuki.