Determinants of mortgage uptake

Abstract

This study sought to examine the determinants of mortgage uptake in Kenya. This study adopted a cross sectional design of the various mortgage lending institutions in Kenya. Data was drawn from the registered commercial banks by the Central Bank of Kenya. There were 43 registered commercial banks in Kenya as of 30 December 2014. Purposive sampling was used to select 20 mortgage lending institutions and commercial banks which have the most mortgage accounts in the country. The study only used secondary data which was collected from financial statements and government policy papers. Data was analysed using descriptive and regression analysis. The results reveal that the various determinants of mortgage uptake include property prices, interest rates, level of income, costs of operations, the mortgage process as well as the size of the bank. It is concluded that these factors have had a significant influence on the uptake of mortgage products in Kenya. The study recommends that management of mortgage lending institutions need to ensure that these determinants are managed in order to increase uptake of mortgage products.