Monthly home-loan repayment, total interest, and amortisation in KES.
Monthly repayment
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Total interest
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Total repaid
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Worked example
Take a home loan of KES 8,000,000 at 13.75% a year over 20 years. The monthly rate is 13.75% divided by 12, about 1.1458%, and there are 240 monthly payments. Standard amortisation fixes the payment so the balance reaches zero at the end of the term. At these inputs the monthly repayment is KES 98,032.43. Over 240 months that totals KES 23,527,783, of which KES 8,000,000 is principal and KES 15,527,783 is interest.
Item
Value
Loan amount
KES 8,000,000
Annual rate
13.75%
Term
240 months
Monthly repayment
KES 98,032.43
Total interest
KES 15,527,783
Total repaid
KES 23,527,783
Over a 20-year term at this rate the interest is larger than the amount borrowed. The chart below splits the total repaid into principal and interest.
How it is calculated
A repayment mortgage uses the standard amortisation formula. The monthly payment equals the principal times the monthly rate times (1 plus the monthly rate) raised to the number of months, divided by that same power of (1 plus the monthly rate) minus one. The monthly rate is the annual rate divided by 12, and the number of payments is the term in years times 12. Early on, most of each payment is interest on the large outstanding balance, and only a small slice reduces the principal. As the balance falls, the interest portion shrinks and the principal portion grows, until the final payment clears the loan. Kenyan home-loan rates typically track the Central Bank Rate plus a lender margin, so even a small rate change moves the payment and the total interest noticeably. Owner-occupiers can also claim mortgage interest of up to KES 30,000 a month as a deduction against taxable pay.
Frequently asked questions
How are mortgage repayments calculated in Kenya?
Repayments use standard amortisation: each monthly payment covers interest on the outstanding balance plus a slice of principal, so the balance falls to zero by the end of the term. Kenyan home-loan rates move with the Central Bank Rate plus a lender margin, so a small rate change can shift the payment noticeably.
Can I claim a tax deduction on mortgage interest in Kenya?
Yes. Owner-occupiers can deduct mortgage interest of up to KES 30,000 a month, which is KES 360,000 a year, from their taxable employment income under PAYE. The deduction applies only to the interest portion of your repayment, not the full instalment, and only where the loan is used to purchase or improve your own home. Confirm your eligibility with the KRA before claiming.
How does the loan term affect total interest paid on a Kenyan mortgage?
A longer term reduces the monthly repayment but sharply increases the total interest paid over the life of the loan. On an KES 8 million loan at 13.75 percent, stretching from 20 to 25 years lowers the monthly payment but adds several million shillings of extra interest. The calculator shows total interest alongside the monthly figure so you can see both sides of that trade-off.
What is a typical home-loan interest rate in Kenya?
Kenyan mortgage rates are set by each lender as the Central Bank Rate plus a margin, so they move when the CBR moves. Rates from regulated banks have typically ranged from around 12 to 16 percent in recent years depending on the lender, loan type, and borrower profile. The default of 13.75 percent in this tool is illustrative, and you should replace it with the rate your lender has quoted you.