After announcing that it will be lowering its lending rates to 22% from 24%, Kenya Commercial Bank through its mortgage division S&L will be dropping the mortgage rates too, effective June 1st.

During Kenya Commercial Bank's Annual General Meeting on Friday 18th, group chief executive Martin Oduor-Otieno said the Bank will be dropping its base rates to 22% while S&L mortgages would drop to 19%. However, the bank has announced that it will be dropping its mortgage rates to 17.5% beginning June 1st.

High interest rates on loans has been blamed by real estate developers and individuals who want to develop new housing units. There is an estimated housing deficit of about 150,000 units a year in Kenya. This has resulted to tenants paying higher rents for lower quality housing especially in areas where road infrastructure has been improved.

A two bedroom house along Thika Superhighway which was costing Shs. 9, 000 a month less than two years ago now costs up to Shs. 20,000 with minimal improvements done to them in terms of fittings and quality. Development of new units has slowed down or stalled compared to how it was two years ago.