Kenya: Mortgage Approval Does Not Guarantee the Keys to Your Home, Absa Says

Nairobi — Getting a mortgage approved does not necessarily mean a homebuyer is immediately ready to take possession of a property, with Absa Bank Kenya highlighting the legal and conveyancing steps that must be completed before financing can be disbursed.

The bank says borrowers who have secured mortgage approval still have to navigate ownership verification, legal documentation, payment of taxes and other transaction costs, approvals and registration of the property before the purchase is completed.

"Getting a bank's approval is only half the journey," Absa Bank Kenya Head of Mortgage Beatrice Chege says, noting that the mortgage process continues through the legal stage until the property is transferred and registered.

The post-approval stage typically brings together the buyer, the buyer's advocate and the lender's legal representatives, with various documents and requirements needing to be completed before the transaction can proceed.

During conveyancing, ownership of the property is verified, contracts and transfer documents are prepared and executed, and the relevant taxes, fees and clearances are processed.

Depending on the transaction, borrowers may also be required to interact with government land administration systems, including the Ardhisasa platform, and upload documents and signatures electronically.

Absa says delays can arise when documents take time to move between the different parties involved in the transaction or through government offices.

The bank also identifies borrower disengagement as a potential challenge, particularly after a lengthy application and approval process.

Another issue, it says, is fragmented information, where customers interact with different teams during different stages of the mortgage process and may only learn about certain requirements or costs once they reach the legal stage.

The additional costs can include stamp duty, legal fees, registration charges, valuation costs, land rates clearance and insurance premiums, depending on the transaction.

Absa says borrowers who have not budgeted for these costs may have to secure additional funds before the transaction can proceed.

Digital processes can also add another layer of complexity for customers who are required to upload documents and signatures on online platforms for the first time.

The bank says lenders can help reduce such delays by maintaining communication with customers throughout the conveyancing process instead of leaving borrowers to navigate the legal stage without sufficient guidance.

It recommends regular updates, clearer timelines and explanations of what borrowers are expected to do at each stage.

Absa also says digital support should form part of the mortgage process where customers are required to use online government or lender platforms.

The concerns around land administration come amid ongoing government efforts to digitise land records and improve services.

Lands and Public Works Cabinet Secretary Alice Wahome said in August 2025 that delays in title verification and land searches were increasing the cost of credit, discouraging investment and frustrating homeowners. She said the government was accelerating digitisation of land registries to improve service delivery.

The mortgage process comes against a backdrop of a relatively small residential mortgage market in Kenya.

According to the Central Bank of Kenya's 2024 Residential Mortgage Survey, there were 30,016 mortgage loans in the market in December 2024, up from 29,260 a year earlier.

The value of outstanding mortgage loans increased by 3.3 percent to Sh279.3 billion, while the average mortgage loan size declined from Sh9.4 million in 2023 to Sh9 million in 2024.

The average mortgage interest rate stood at 14.9 percent in 2024, compared with 14.3 percent in 2023. About 85.9 percent of mortgage loans were on variable interest rates, while the majority of banks maintained maximum loan-to-value ratios below 90 percent of the property value.

The bank says improving the mortgage experience should therefore extend beyond approving a customer's loan.

"At Absa Bank Kenya, we are continuously working to engage our customers and walk them through their expectations from the beginning of the mortgage process to the very end," the lender says.

Absa says borrowers should receive clear information from the beginning on the stages involved, the documents required, the costs they are expected to meet and the actions they need to take before a property can be registered in their name.

The lender says borrower education should remain a continuous part of the mortgage journey rather than ending when financing is approved.

Read the original article on Capital FM.