This archive report was first published on 29 September 2021.
Launched in July 2021, the Co-operative Bank of Kenya's pension-backed mortgage loan facility is a groundbreaking initiative that targets members of pension schemes in Kenya.
The facility aims to enable over 3 million members of pension schemes in Kenya to qualify for a mortgage, who otherwise would have found it difficult to raise enough funds to buy a home.
Retirees can use 40 per cent of their pension to access the home loans, with an extended repayment period of up to 20 years, subject to the retirement age of the borrower.
“Members of pension schemes are now able to utilise up to 40 per cent of their accrued pension benefits as down-payment to buy a home,” says Co-op Bank.
Applicants must be members of a pension scheme who are still in active employment and have not yet attained retirement age. The 40 per cent of benefits will be used as down payment.
The costs associated with the mortgage include commitment fees, stamp duty for transfer of property, stamp duty for registration of charge, legal fees, valuation fees, and insurance fees.
According to Co-op Bank, to access the product, a member of a pension scheme will need to determine their accrued pension benefits, identify a house, and apply for the retirement benefits mortgage loan at the nearest Coop Bank branch.
