How METRIKA calculates this
METRIKA simulates both paths month by month:
- Buyer pays the deposit and buying costs, then the mortgage (reducing balance) plus ownership costs. Net worth = home value − selling costs − mortgage balance + any savings invested in months when owning cost less than rent.
- Renter invests the same upfront cash and, in months when owning would cost more than rent, invests the difference. Rent rises once a year.
Both portfolios earn the same return, so the comparison is fair. Taxes on investment returns (15% withholding on interest) and mortgage interest relief are not modelled.
What to know in Kenya
Kenyan home ownership decisions often weigh land or a family plot against renting in town. Stamp duty is 4% of value in municipalities and 2% elsewhere. The Kenya Mortgage Refinance Company supports single-digit-rate mortgages for qualifying affordable homes through partner banks and SACCOs; if you qualify, try a lower mortgage rate here.
Frequently asked questions
Is it better to rent or buy in Nairobi?
It depends on the price-to-rent ratio, your mortgage rate and how long you'll stay. Where yearly rent is a small share of the price, renting and investing often wins over 5–10 years.
What is a breakeven year?
The first year when the buyer's net worth passes the renter's. If you plan to move before then, renting is usually the better financial choice.
Why include selling costs?
Your home only turns into cash after agent, legal and transfer costs. Leaving them out makes buying look better than it is.
Can foreigners buy property in Kenya?
Yes, but under Article 65 of the Constitution, non-citizens can only hold land on leasehold of up to 99 years, not freehold. Apartments are usually sold on leasehold, so foreign buyers can own them.
What is stamp duty on property in Kenya?
Stamp duty is 4% of the property's value in municipalities and 2% in rural areas. Also budget for legal, valuation and registration fees.
How much deposit do I need for a mortgage in Kenya?
Most lenders ask for 10% to 20% of the price. Affordable-housing mortgages backed by the Kenya Mortgage Refinance Company can allow a 10% deposit.
Can I get a mortgage in Kenya while living abroad?
Several Kenyan banks offer diaspora mortgages. They usually ask for proof of income, a KRA PIN and your ID or passport, and may need a larger deposit.
Is it better to buy land or rent in Nairobi?
Land often costs little to hold but earns no income until it is developed. Renting and investing the difference can win if you will move within a few years. Use this calculator with your own figures.
What is a good rental yield in Kenya?
Gross rental yield is a year's rent divided by the property price. When it's low, renting is often cheaper than buying; this calculator shows the yield for your numbers.
Sources
- Kenya Mortgage Refinance Company
- Central Bank of Kenya — Central Bank Rate
- Central Bank of Kenya — Monetary Policy Committee decisions
- Mukamba Law — Starting a business in Kenya as a foreigner
- Business Registration Service — company registration
- Kenya Investment Authority (InvestKenya)
Links are for reference only. METRIKA is independent and not affiliated with or endorsed by these organisations.
Rates checked 6 Nov 2026. METRIKA gives estimates, not financial or tax advice.