Every month, rent for your business premises leaves your account and builds someone else's asset. At some point many owners ask: why not own the space instead? A commercial mortgage makes that possible — financing offices, rental units and other income-generating property. Here's how the KCB Commercial Mortgage works, what to expect, and how it can turn rent into equity.
What is a commercial mortgage?
A commercial mortgage finances the purchase or construction of property used to generate income — offices, rental units and similar — rather than a home. KCB offers up to 80% financing (loan-to-value) based on the purchase price or valuation, or the priced bill of quantities, over a term of up to 20 years. It's available to individuals, companies and partnerships, and investment groups. It works much like a residential mortgage, but it's assessed on the commercial property and, often, on the income the property or business generates.
Who uses a commercial mortgage
• Business owners buying their own premises instead of renting.
• Investors buying commercial property to earn rental income.
• Developers and companies expanding into additional units or locations.
How it works and what to expect
Expect a deposit (with up to 80% financing, you'd fund from about 20% equity), a professional valuation of the property, and an assessment of how the loan will be serviced — KCB can consider rental, business and other income. Where you're constructing rather than buying, funds are released in up to four instalments and you service interest during construction plus two months afterward. The property offered as security must be in Kenya, with a title holding at least 35 years unexpired.
Rent vs own: the case for buying
Owning your premises replaces an ongoing cost with an asset you build equity in, gives you control over the space, and shields you from rent increases. For investors, a commercial mortgage turns a property into an income-producing asset. The trade-off is the upfront equity and a long-term commitment — so weigh the monthly repayment against your current rent and your plans for the space.
What you'll need
• A valid sale agreement or offer letter, and an open KCB account (KES or USD).
• A title copy with a minimum unexpired lease term of 35 years, plus a valuation and official search.
• For construction: approved plans, a signed priced bill of quantities, a contractor's all-risk policy and a 10% performance bond.
• Business and financial records supporting affordability.
Common mistakes to avoid
• Underestimating the equity needed — with up to 80% financing, you fund from about 20%, plus costs.
• Overlooking how the property's income is assessed in servicing the loan.
• Skipping due diligence on the title and the property's approvals.
• Not budgeting for the costs beyond the deposit (legal, valuation, stamp duty, insurance).
Frequently asked questions
What is a commercial mortgage?
A loan to buy or build income-generating property — offices, rental units — rather than a home, repaid over a term after a deposit.
How much can I borrow?
KCB finances up to 80% of the purchase price or valuation (or priced bill of quantities), over up to 20 years.
Can I use it for rental income?
Yes — it's designed for income-generating property, and KCB can assess the rental income when servicing the loan.
What deposit do I need?
With up to 80% financing, you'd fund from about 20% equity, plus transaction costs. Confirm the exact requirement for your case.
Can an investment group or company apply?
Yes — individuals, companies and partnerships, and investment groups can all apply.
Is buying better than renting for a business?
Owning builds equity and control and hedges rent rises, at the cost of a deposit and a long-term commitment — the right call depends on your business and plans.
Get started
A commercial mortgage lets your business stop paying rent and start building an asset of its own. If owning your premises is the goal, take the next step and turn that monthly rent into equity.
