The Competition Authority of Kenya (CAK)has flagged 12 lenders with hidden mortgage charges.
CAK was probing information on 27 lenders forwarded by customers and found the information by 12 to be incomplete, unclear, and unfavourable. The charges that drove up mortgage rates include costs for origination, booking, valuation, mortgage and title transfer, commissions, brokers’ fees, legal fees, insurance and stamp duty
The 12 include KCB Bank, NCBA Bank, Absa Bank Kenya, DIB Bank Kenya, Mayfair Bank, Consolidated Bank, Victoria Commercial Bank and Bank of Baroda.
“As at 30th June 2021 eleven (11) banks had revised their terms and conditions and informed the Authority of the rollout while the remaining one (1) requested for an extension of time,” CAK Director-General Wang’ombe Kariuki noted in the 2021 Auditor-General’s Report.
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“From the reviewed T &Cs, twelve (12) banks were found to be non-compliant with Section 56 of the Act on unconscionable conduct and consequently they were required to revise their T&Cs.”
The charges pushed the cost of mortgages upwards,
As of December 2020, there were 26,971 mortgage loans in the market, with the Central Bank of Kenya (CBK) indicating 80.2 percent of mortgage loans were on variable interest rates in 2020.
“Institutions suggested a number of measures to be put in place to support the residential mortgage market in Kenya. Some of the suggested measures include streamlining and simplifying the legal and regulatory process governing the mortgage sector for transparency, efficiency and certainty,” the CBK said.
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