Standard Chartered Bank (Kenya) will be offering mortgages at 16.9% on mortgages transfered from other banks. The rate will be applicable to mortgages transfered only. The promotion will run up to the end of July in the bank’s bid to raise its mortgage book.
This has come at a time when interest rates on loans and mortgages are expected to remain high as the Central Bank of Kenya (CBK) resolved to maintain the Central Bank Rate (CBR) at 18%. Commercial banks use the CBR as a decider on what rate to charge loan borrowers.
This is a strong indicator that interest rates on loans is bound to remain high after an earlier bid by parliament to cap interest rate was defeated. Parliament had proposed to cap the rate at 22%, 4 per-centage points above the prevailing CBR. Interest rate on loans increased by over 15 percentage points from 10% in 2010 to 25% in January 2012.