WHY MORTGAGES KEEP KENYANS POOR

The hard truth: banks win, you lose. Here’s what they don’t want you to know.

There has been this ongoing debate. Is buying a house through a mortgage really a good investment? “Si ni better I buy a house on mortgage, at least ni yangu?” Well, it’s time to close the discussion once and for all. Today, let’s strip away the myths, look at the hard data, and tell the truth that few dare to say:

Taking a mortgage is not the smartest move for building wealth - at least not for most Kenyans.

Yes, I know that stings. But let’s walk through it together.

1. The Kenyan Mortgage Reality: Almost Nobody Has One

Did you know Kenya has fewer than 30,000 active mortgages in a country of over 54 million people? That alone should tell you something. If mortgages were the magical path to wealth, wouldn’t half the population already be rushing to the banks?

The truth: most Kenyans instinctively know that mortgages are traps dressed up as “the dream of home ownership.”

2. Wealth is NOT Built in the House You Live In

Let’s settle this: the house you live in is not an investment. It doesn’t pay you, it drains you.

Wealth is built by deploying your resources so that other people pay you. When your hard-earned capital goes into an asset, it should bring returns - cash flow, appreciation you can use, and flexibility. A mortgage does the opposite.

3. Mortgages Are Cash-Flow Negative from Day One

Let’s say you buy a 10M shilling home on mortgage. You’ll be paying maybe KES 100K+ every month. Yet if you rented that same house out, you’d barely get 40–50K in rent

That means you’re losing money every single month. And that’s before factoring in repairs, service charges, and renovations. Research has shown homeowners spend 38% more per month than renters on costs.

So why call it an “investment” if it’s bleeding your cash flow?

4. Mortgages Lock Your Capital

Once your money is stuck in that house, you can’t quickly adjust.

• Found an equity fund returning 28%? Too bad - you can’t liquidate half your house to jump in.
• Want to rebalance your portfolio? Forget it - you’re locked.

Flexibility is everything in wealth building. A mortgage removes it.

5. Opportunity Cost: Mortgages Lose to Other Investments

Between 1992 and 2024, the S&P 500 delivered an annual return of 10.4%. Residential real estate delivered just 5.5%. That’s a 100% difference over time.

So, while you’re celebrating paper appreciation on your home, the guy who put the same money into equities is running laps around you.

6. The Silent Killer: Maintenance and Renovations

Here’s a stat that will shock you: 78% of home improvement projects recover less than their cost when you resell.

Replace the roof for 1M shillings? You’ll only recover 400K–600K of that value at resale.

Translation: the more you pump into your house, the less you get back. That’s not investing, it’s emotional spending disguised as “value addition.”

7. Mortgages Follow You into Retirement

The African Development Bank found that mortgages make up 75% of all debt held by people over 70 years old.

Imagine retiring only to realize you’re still paying the bank every month. By then, your income is lower, your expenses are higher, and your strength is gone. That’s when foreclosure comes knocking. Do you really want to live your sunset years as a prisoner of the bank?

8. Banks Win, You Lose

Here’s the brutal truth: A mortgage is the bank’s clever way of ensuring you’re their customer for life. You don’t own the house - the bank does, until the last cent is paid.

Lose your job? Tough luck. You’ll still owe. Miss a few payments? Foreclosure. And even if you pay it off, you’ve carried decades of financial burden instead of building real wealth.

So What’s the Better Play?

If you truly want to build wealth:

• Look for cash-flow positive assets from day one.
• Invest in equities, bonds, gold, AI stocks, balanced portfolios - instruments that pay you and remain flexible.
• If you must do real estate, do it professionally: only buy if rental income is at least 1% of the property cost per month , and engineer capital appreciation, not just “hope” for it.

We’ve put together resources to help you:

• 📘 Kingdom Finance eBook
• 🧾 Budgeting templates
• 📊 Investment tips
• 💬 Community support

The Bottom Line

A mortgage is not the wealth-builder it’s sold to be. It is, in fact, a liability disguised as an “asset.”

• It drains your cash flow.
• It locks your capital.
• It loses to better opportunities.
• It enslaves you to the bank.

If your net worth is below $500,000 (about KES 60M), a mortgage is not your strategy. You’re better off building flexible, cash-producing investments first.

Because wealth isn’t about living in a house you “own on paper.” Wealth is about freedom, cash flow, and4 choices.

Brothers and sisters, stop being mortgage prisoners. There are better, smarter, and faster ways to grow your money.

The world is full of broke people trying to impress other broke people.

Don’t be one of them. Don’t live a lie. The goal is not to post wealth, it’s to build it - slowly, wisely, and faithfully.

You’ve got this. Let’s fix it together. One step at a time.

Now go out there, take control of your finances, and build a future you’re proud of.

We’re here to walk with you - step by step. At Set Free Capital , we’re a team of financial planners, advisors and counselors. We’re here to help you align your money life with purpose, peace, and progress.

So here's your call to action:

• We have free resources for members
• We have budgeting tools , classes, and templates
• We host training sessions and community events.
• Membership is only KES 1,500 and unlocks so much value

Let this year be different. Let it be the year you finally take charge of your finances - not alone, but with a community that cares.

Want to Go Further, Faster? Join the Kingdom Finance Family!

If you’re ready to take your savings and investment journey to the next level, we’ve got something just for you.

For a one-time membership fee of only Ksh 1,500 , you get lifetime access to a treasure chest of resources - some completely FREE - including our powerful Kingdom Finance eBook that breaks down everything you need to know about building wealth God's way.

But that’s not all...

You also become part of our vibrant online community - a safe, encouraging space where we:

• Share real-time investment tips
• Alert you to new and rising opportunities
• Celebrate wins together
• Grow our financial knowledge side-by-side
• And yes... hold each other accountable like a true success squad

This isn’t just a membership it’s about fulfilling the call of God to finance His work.

“Borrow only what you can comfortably repay—your home shouldn’t become a financial burden.”

Janet Kilalo, Chief Executive Officer