How Much Deposit Do You Need to Buy a House in Kenya?

Owning a home is a significant milestone for many Kenyans, but the process of buying a house can be daunting, especially when it comes to understanding the financial requirements. One of the most critical aspects is determining how much deposit you need to secure a home, particularly in 2025, as the real estate market continues to evolve. This blog explores the deposit requirements for purchasing a house in Kenya, the factors influencing these amounts, available schemes, and practical tips for prospective buyers.

Understanding Deposits in Kenya’s Housing Market

In Kenya, a deposit is an upfront payment made by a buyer to demonstrate commitment and secure a property, whether through outright purchase, mortgage, or government housing schemes. Unlike some international markets where deposits might range from 5% to 20% of the property value, Kenya’s deposit requirements are heavily influenced by government policies, lender preferences, and the type of housing project. As of April 2025, the most common housing options include private developments, bank-financed homes, and government-led affordable housing projects under the Affordable Housing Programme (AHP).

The deposit serves as a safeguard for sellers and lenders, reducing their risk by ensuring buyers have a stake in the property. It also affects the loan-to-value (LTV) ratio, which is the percentage of the property’s value that a lender is willing to finance. A larger deposit typically results in better loan terms, lower interest rates, and increased chances of loan approval.

Deposit Requirements for Different Housing Options

1. Government Affordable Housing Projects

The Kenyan government’s Affordable Housing Programme, launched in 2017 and expanded under President William Ruto’s administration, has become a major avenue for homeownership. As of 2025, these projects target low- to middle-income earners and offer units priced between Ksh 840,000 and Ksh 5.16 million, depending on size and location.

For these units, the standard deposit requirement is 10% of the property’s cost. For example:

• A one-room social housing unit costing Ksh 840,000 requires a deposit of Ksh 84,000.
• A two-bedroom affordable unit priced at Ksh 3.15 million (as seen in Nakuru projects) requires a deposit of Ksh 315,000.
• A market-driven three-bedroom unit at Ksh 5.16 million requires a deposit of Ksh 516,000.

Buyers can register through the Boma Yangu portal (*832# or www.bomayangu.go.ke) and pay the deposit, with the remaining balance financed through the Tenant Purchase Scheme (TPS) or mortgages at low interest rates (3% to 9%, depending on income). Social media discussions, particularly on platforms like X, have highlighted frustrations about these deposits, with many arguing that Ksh 315,000 or Ksh 425,000 is still unaffordable for hustlers, boda boda riders, and mama mbogas, despite the “affordable” label.

1. Private Developments and Bank-Financed Homes

For private housing projects or homes purchased directly from developers or individuals, deposit requirements can vary. Most banks and financial institutions in Kenya, such as Equity Bank, KCB, and the Kenya Mortgage Refinance Company (KMRC), require a minimum deposit of 10% to 20% of the property value. For a house valued at Ksh 10 million in Nairobi, this could mean a deposit ranging from Ksh 1 million to Ksh 2 million.

Some developers, especially in emerging markets like Kiambu, Machakos, or Mombasa, may offer flexible payment plans, allowing buyers to pay a smaller initial deposit (as low as 5%) during construction, with the balance spread over time. However, these arrangements often require buyers to have a strong credit history and stable income to qualify for subsequent financing.

1. Cash Purchases and Installment Plans

For those buying directly from landowners or smaller developers, no formal deposit might be required if paying in full. However, installment plans—where buyers pay a deposit and spread the remainder over months or years—are becoming popular. In such cases, deposits typically range from 10% to 30%, depending on the seller’s terms. For example, a Ksh 2 million plot in Nakuru might require a Ksh 200,000 to Ksh 600,000 deposit, with the balance paid over 12 to 36 months.

Factors Influencing Deposit Amounts

Several factors determine how much deposit you need:

• Property Location: Houses in prime areas like Westlands or Kilimani command higher deposits due to inflated prices, while regions like Murang’a or Embu under the Mt. Kenya housing projects have lower thresholds (e.g., 10% as noted in recent posts).
• Buyer’s Income and Creditworthiness: Lenders assess your income, savings history, and debt obligations. Higher earners or those with good credit might negotiate lower deposits or better terms.
• Type of Financing: Government schemes like AHP often standardize deposits at 10%, while private banks may demand more. Some innovative schemes, such as those by Kings Pride Properties, offer 0% deposits during construction, relying on installment payments and future mortgage appraisals.
• Market Conditions: In 2025, rising construction costs and inflation have pushed property prices up, but government subsidies and tax incentives (e.g., stamp duty exemptions) help mitigate deposit burdens for first-time buyers.

Challenges and Criticisms

Public sentiment, as reflected in posts on social media, reveals widespread concern about deposit affordability. Many Kenyans argue that even a 10% deposit, such as Ksh 315,000 for a Ksh 3.15 million unit in Nakuru, is out of reach for low-income earners. Critics point out that the government’s definition of “affordable” doesn’t align with the financial reality of hustlers, small-scale traders, and informal sector workers, who form a significant portion of the population.

Additionally, delays in project completion, land disputes, and lack of transparency in some schemes have eroded trust. Some buyers report being asked for additional fees or facing allocation issues, further complicating the process.

Tips for Saving for a Deposit

If you’re planning to buy a house in Kenya in 2025, here are some practical steps:

• Start Small: Save consistently through SACCOs, bank accounts, or mobile money platforms like M-Pesa. Automating savings can help build the required amount over time.
• Leverage Government Schemes: Register for AHP and contribute to the National Housing Development Fund (NHDF) to qualify for subsidized units and lower deposits.
• Seek Family or Community Support: Some buyers pool resources with family members or join chamas (investment groups) to raise the deposit.
• Improve Creditworthiness: Pay off existing loans and maintain a good credit score to negotiate better terms with lenders.
• Explore Zero-Deposit Options: Certain developers and projects, especially for properties under construction, offer no initial deposit but require regular installments, which can be more manageable.

Conclusion

In 2025, the deposit you need to buy a house in Kenya depends on the type of property, location, and financing option. For government-affordable housing units, a 10% deposit is standard, ranging from Ksh 84,000 for the cheapest units to Ksh 516,000 for higher-end options. Private homes and bank-financed properties may require 10% to 20%, while innovative schemes offer flexibility for those with limited upfront capital.

While these requirements open doors for many, they also highlight the financial challenges faced by low-income Kenyans. The government and private sector must continue to innovate, perhaps by expanding zero-deposit models or increasing subsidies, to ensure housing remains accessible. For prospective buyers, strategic saving, leveraging available schemes, and staying informed about market trends are key to turning the dream of homeownership into reality.