ABSA Bank Introduces 8.9% Home Loan Package for Property Buyers

Absa Bank Kenya has rolled out a new mortgage financing programme targeting one of the biggest challenges facing Kenya’s housing sector: connecting willing homebuyers with housing projects before construction is completed.

The bank announced a developer-led home financing solution that will allow qualified buyers to access mortgages at an interest rate of 8.9 per cent per annum and financing of up to 105 per cent on selected developments. The move is expected to ease access to homeownership while helping developers secure buyers earlier in the project cycle.

The launch comes as Kenya’s housing sector continues to struggle with a growing mismatch between demand and supply. Although thousands of Kenyans aspire to own homes, the high cost of financing, rising property prices, and limited access to affordable mortgages have slowed homeownership rates across the country.

Industry data shows that Kenya requires about 250,000 housing units every year, yet annual production remains well below that figure. The result has been a housing deficit estimated at more than two million units, with the shortage particularly affecting low and middle-income earners.

Financial institutions and developers have increasingly been searching for ways to close the gap. One of the major obstacles has been securing committed buyers before projects are completed. Many developers invest heavily in construction without certainty that enough units will be sold once they hit the market.

Absa believes its new financing model could help change that.

Under the arrangement, prospective homeowners can engage with developers while projects are still under construction and receive mortgage pre-assessments before the homes are completed. This gives buyers a clearer picture of their borrowing capacity and allows developers to gauge demand much earlier.

The bank says customers purchasing homes in approved developments will also benefit from negotiated legal and valuation services, helping reduce some of the costs associated with buying property.

The model is designed to create a more coordinated housing ecosystem where developers, financiers and buyers work together from the beginning rather than waiting until a project is complete.

Speaking during the International Housing Solutions Kenya 2nd Affordable Housing Conference 2026, Absa Bank Kenya Managing Executive for Corporate and Investment Banking James Agin said housing demand is not the country’s biggest challenge.

“Kenya’s housing challenge real constraint lies in how housing is financed, delivered and connected to the end user,” he said.

According to housing experts, mortgage penetration in Kenya remains among the lowest in Africa despite growing urbanisation and a rapidly expanding middle class. Many Kenyans earn their income through informal businesses, farming, freelancing and self-employment, making it difficult for them to fit into traditional mortgage qualification models that rely heavily on formal employment records.

This financing gap has contributed to the slow uptake of mortgages and limited access to homeownership for many households.

Absa says its latest proposition is intended to address some of these structural barriers while supporting the country’s broader affordable housing agenda. By creating stronger links between housing developers and potential homeowners, the bank hopes to improve project viability, reduce the number of unsold units and expand access to housing finance.

As Kenya’s population continues to grow and urban centres expand, experts agree that innovative financing models will play a critical role in determining whether the country can meet its housing needs. For lenders, developers and aspiring homeowners alike, the focus is increasingly shifting from simply building houses to finding practical ways of helping people buy them.