• Rent or Buy? Homeownership is About Security

  • The Burden of Societal Demands

  • Financing Options for Homeownership

  • The Dream vs. The Data

  • The Mortgage Option for Homebuyers

  • The Freedom We Overlook

  • The Tradeoffs

  • Buy or Rent? The Answer & A Reality Check

A cherished hallmark of adulting” deeply entrenched into the the Kenyan psyche alongside the reveries of becoming an overnight mpango wa biashara (business magnate) is the dream of homeownership.

Imagine with me then that you arrive at a crossroads, with one sign pointing you towards “Buy Your Own Home” while the other points to “Keep Renting.” Behind the first sign lies a house, gleaming like a trophy, but surrounded by mountain of hurdles and paperwork, a towering mortgage officer, and whispers of fluctuating interest rates.” Behind the second sign, there’s a cozy apartment, complete with a landlord whose WhatsApp profile picture hasn’t been updated in ages.

So, which path do you take?

Rent or Buy: Homeownership is About Security

At its core, the dream of homeownership is about security. It’s the longing for a place where you’re safe from landlords, skyrocketing rents, and that dreaded “Notice to Vacate” letter that always seems to arrive just after payday.

A home is the anchor in a chaotic world—a symbol of stability when everything else feels uncertain.

Let’s also be real—buying a home is also about status and is the ultimate flex. Everywhere. It’s like saying, “Look, I’ve arrived. And guess what? I’ve got a parking spot!” There’s an undeniable thrill in casually dropping, “Yeah, I’m looking at property in Kilimani” into a conversation, even if all you’ve done is bookmark the listing.

The Burden of Societal Demands

Society validates us when we appear not just to be merely getting by but thriving—and nothing screams “thriving” louder than the keys to a place you call your own. A home satisfies our primal need for security and status. Owning property means no more arguing with landlords over leaking roofs or trying to disguise your dog-that’s-actually-not-allowed as a “small relative.” It’s why, despite the laughable mortgage rates and the cost of a 2-bedroom feeling more like a phone number than a price tag, we keep chasing the dream. Because homeownership? It’s not just a goal. It’s a statement. Suddenly, when you own a home, you’re magically “more acceptable”. It isn’t something openly discussed out there, but you certainly become the envy of many.

Before we romanticize the idea of homeownership as being as idyllic as waking up to birds chirping on a serene beside a placid brook on a bright sunshiny morning, the hard realities of the “buy or rent” decisions deserve some unpacking beyond whatever emotions either decision elicits.

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Rent or Buy: Financing Options for Homeownership

At the heart of the journey to homeownership lies a simple truth: the acquisition of every home involves financing in one way or another. Whether you’re saving diligently to pay out of pocket or leveraging external funding like a mortgage, the path to owning a home requires a financial commitment that shapes not just your bank balance but your broader life choices.

This core reality presents individuals with two distinct options – out-of-pocket purchase or the mortgage route (which offers access to immediate ownership but comes with structured debt and its associated costs).

If you choose the self-financing route, you’ll bleed whatever savings you have to enjoy the security and status that owning a home gives at the expense of something else – maybe that holiday, additional income from investments you may have had to liquidate, that side hustle you could have set up to increase your income, the opportunity to advance your education and career. Something.

On the other hand, if you borrow to finance homeownership, you will have to contend with the realities of financing. If you’re that small but privileged club of workers who can access a mortgage, you have the opportunity to own a home outright—eventually. It is a long-term investment in your future and your legacy – a full-on committed long-term relationship with your bank – you’re locked in, your monthly “dates” are expensive, and there’s no ghosting allowed. Repayments will take a chokehold on you and feel like a lifetime gym membership you forgot you signed up for. Plus, now you own it. If it breaks it’s all on you! Let’s not forget the maintenance. Owning a home means you are now the “landlord.” The roof leak? Your problem. The fence that fell over during the storm? Also, your problem.

To acquire that home, you are trading off that time and labour for security and status. Both options demand discipline, patience, and often years of sacrifice.

Homeownership: The Dream vs. The Data

In 2023, statistics from the Central Bank of Kenya’s Bank Supervision Report of 2023 revealed that the average mortgage loan size in Kenya in 2023 was KES.9.4 million while the average interest rate was 14.3 percent (with a range from 8.7 percent to 18.6 percent). The average loan maturity for a mortgage in 2023 was 11.7 years, (with the shortest loan being 5 years and the longest 18 years).

Let’s say you’re one of the lucky few who could theoretically secure a KES 5 million mortgage for a cozy 2-bedroom apartment in Syokimau. Your monthly repayment would be on the lowest end KES 56,879 and possibly as high as KES 87,608.44 (with an average of KES 63,648).

To comfortably afford this without violating the golden debt-to-income rule of 30%, you’d need to bring home between KES 189,597 and KES 292,030 per month (an average of KES 212,160). Many Kenyan banks demand a debt-to-income ration of 35% to 40% on mortgage loans.

Here’s where the reality bites: per 2022 KNBS statistics fewer than 12% of the Kenyan workforce earns above KES 100,000 per month. So, unless you’re hobnobbing with top-tier professionals or have a thriving business, this “dream” is more elusive than spotting the elusive leopard in Nairobi National Park. This indicates that very few employed individuals can access a mortgage of even Kshs. 5 million.

Rent or Buy: The Mortgage Option for Homebuyers

If you had the opportunity to access mortgage financing, would you take it? Would you embrace the chance to own a home sooner, even if it meant committing to decades of structured repayments? Or would the idea of carrying long-term debt weigh too heavily against your vision of financial freedom?

As one of the few who qualify for mortgage financing in Kenya, your decision isn’t just about affordability—it’s about how you perceive risk, reward, and opportunity in your financial journey. Do you see a mortgage as an enabler of your dream, allowing you to invest in a place to call home while leveraging other resources for growth? Or does it feel like a gamble, where the stakes—interest rates, fluctuating incomes, and market uncertainties—loom larger than the potential gains?

In a market where only a minority can even consider a mortgage as an option, the question is: What would this choice mean for you, your aspirations, and your long-term financial goals?

In Kenya, where the mortgage market remains relatively unknown, it’s easy to overlook this financing option. Yes, mortgages are not without their challenges—risk assessments by banks alone weed out more than 90% of the workforce limiting access, and high interest rates can make even the notion of repayments a nightmare in an economy mired with uncertainty. Yet, for those who qualify and approach it judiciously, a mortgage can be a viable pathway to homeownership. It can enable the that much-desired security and status of homeownership, spreading the financial weight over time. By understanding these dynamics, you can make informed choices about how to turn the dream of homeownership into a reality that fits their unique financial journeys.

Realistically, on the numbers alone, homeownership using this route feels more like an exclusive members-only club than a possibility for most of us who may not be on the guest list.

Rent vs. Buy: The Freedom We Overlook

Renting often gets a bad rap. It’s framed as “throwing money away,” a sentiment parroted in many family gatherings where the subtext is clear: You’re not truly successful until you own a home. Renting is often seen as the ultimate betrayal of adulthood. Family gatherings probably sound like:

“Still renting, eh? You know that’s just dead money, right? Real adults buy homes!”

Renting is like dating; it gives you the thrill of commitment without the permanence of marriage. Buying, however, is tying the knot—with your bank. Sure, you’ll get the house, but you’ll also inherit its debts, drama, and an immutablefor better or worse, till do we part” clause.

You’re a nomad, able to pack up and leave at the end on notice, no strings attached. Renting can be the ultimate flex of freedom:

  • Want to move cities? Pack your bags.
  • Found a better deal? Say bye to your landlord.
  • Economy crashing? No 14.3% interest rates to lose sleep over.
  • Don’t like the neighbourhood, find the one you prefer and move there.

But this freedom comes with its quirks: landlords who think 1980s plumbing is “vintage,” annual rent increases that feel like ransom notes, and the knowledge that every shilling you pay is building their equity, not yours. And of course, every rent payment feels a little like buying a pizza for your landlord—great for them, but you’re left holding an empty box at the end.

Rent or Buy: The Tradeoffs

Each decision has its trade-offs. Saving up to buy a home or taking out a mortgage to do the same outright will either have an opportunity cost or straddle your life with the weight of long-term debt. Renting on the other hand often means delaying the benefits of homeownership, potentially forgoing opportunities that arise in a volatile property market.

Rent or Buy: The Answer

So, what’s the answer? Should you buy or rent?

It depends on you – your financial situation, your goals, your lifestyle, and yes, your tolerance for risk. Let nobody tell you that there is a “one-size-fits-all solutionyour decision to buy or rent is just a balancing act between risks, opportunity costs, and personal circumstances. Neither choice is inherently better—they’re just different paths to shelter.

Reality Check: Context is King

While buying might be a worthwhile goal, it shouldn’t come at the expense of financial sanity. Kenya’s housing market is not the panacea of passive income as some would have you believe, nor is renting a sentence to financial mediocrity.

Understanding your financial bandwidth and making a decision that keeps you empowered rather than enslaved is the way to go. There is no shame in renting if it means staying sane, and no glory in buying if it leaves you broke. After all, a home is ultimately where your peace resides—not where your stress compounds.

Want stability? Have generational wealth? Buy. Need flexibility? Don’t want to be tethered to an interest rate? Rent. The notion that you can make successful, personal decisions on the back of, “but so and so did such and such, or so and so is like such and such and so I have to do this and the other to give off the impression that I am this and that” will be your undoing.

At the end of the day, the best decision is the one that aligns with your goals and makes you feel at peace. Whether you choose to own or rent, the key is to remember that the house doesn’t make the home—you do. So, take the plunge or renew that lease, but do it on your terms.

Do you!

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