By Morris Aron
The battle for a market share in mortgage business moved a notch higher after Housing Finance (HF) launched a savings product targeting potential homeowners.
The Cross Over Savings Account aims to bridge the gap between saving schemes and mortgages.
Housing Finance Managing Director Frank Ireri said the launch is in line with its vision to be a key housing supplier and a financial institution of choice.
"The product will allow our clients to save for homes or other commitments," said Mr Ireri.
Customers will access 100 per cent mortgage at interest rates of 10 per cent excluding a two per cent discount when applying for a mortgage.
Customer deposits
They will earn loyalty points with every deposit, which are redeemable through branded items and household appliances.
Mortgage finance institutions offer an average of 80 per cent home loans financing at interest rates of between 12.5 per cent and 17 per cent interest rates.
Only negotiated schemes provided by firms to their employees and civil servant packages offer less than 10 per cent interest rates on mortgages.
The company has rolled out several products to attract new customers.
They include Property Point, a Home Ownership Savings Plan and Makao—a one-stop construction solution for developers.
The developments have been made possible after Housing Finance raised Sh2.37 billion through a rights issue of 115 million shares.
The pool of funds adjusted the company’s books of account as it can take up Sh25 billion in customer deposits and lend out up to Sh30 billion as loans.
"The rights issue gave us the opportunity to take additional deposits and lend out much more than we were previously able," said Mr Ireri.
"We are using that window to come up with products to grow our client base."
