A KSh 500,000 loan at 16.0% over 36 months costs KSh 17,579 a month, KSh 132,827 in interest.
How reducing-balance loans work
Most loans in Kenya, whether from a bank, SACCO, or asset financier, use reducing balance interest. You pay the same fixed amount every month, but early on more of that payment goes toward interest, and less toward the principal. As the outstanding balance shrinks, more of each payment starts going toward principal instead.
This calculator uses the standard amortization formula banks use, so the monthly payment figure should closely match what your lender quotes, though some lenders add processing fees or insurance that aren't reflected here.
Most Kenyan bank and SACCO loans use reducing balance amortization, where each monthly payment is the same amount but the portion going to interest shrinks over time as the outstanding principal falls.
What interest rate should I use for a mortgage in Kenya?
Kenyan bank mortgage rates commonly range from around 13% to 18% per year depending on the lender and your risk profile; check with your specific bank for their current rate.
Does this calculator work for SACCO loans too?
Yes, enter your SACCO loan principal, its stated annual interest rate, and the repayment period in months to see the same reducing-balance breakdown.