Every Saturday morning at a boxing gym off Kariokor market, a trainer named Otieno pairs his sparring partners by weight, never by ambition. A featherweight who fancies himself a heavyweight does not get a vote in the matter. He is put in the ring anyway, taught three rounds of humility, and sent home with the lesson stitched into his ribs: you fight the weight you carry, not the weight you wish you carried.
I bring up Otieno's gym because Kenyan banks run an identical weigh-in on every loan applicant who walks through their doors, minus the mouthguard and plus a great deal more paperwork.
Which brings me to the SMS that has been landing in many an inbox this August: the pre-approved loan offer, dangled the moment your salary clears, promising a Toyota Fielder or, for the more ambitious among you, a three-bedroom unit in Ruaka with a rooftop view of somebody else's swimming pool.
Good people, before you reply "Yes" to that SMS, do what the bank itself is about to do to you: a weigh-in. Loan affordability, or what bankers call the debt service ratio, stripped of the jargon, is simply the shilling ceiling a lender sets on your monthly instalment so that it does not swallow the salary you need to eat, pay rent, and occasionally enjoy a Tusker on a Friday. Nothing more romantic than that.
The law gives you a floor, of sorts. Section 19(3) of the Employment Act, 2007, forbids an employer, and by extension any lender collecting through payroll, from deducting more than two-thirds of your wages at any one time. It is the statutory equivalent of a boxing referee. It will let you take a beating. It will not let you get killed in the ring.
Here is the part your loan officer will not volunteer over the counter: two-thirds is the legal maximum, not the sensible one. Most Kenyan banks, quietly and without ceremony, underwrite mortgages and car loans against a rather tighter number, somewhere between 30 and 40 per cent of net salary, after PAYE, NSSF, SHIF and the 1.5 per cent Housing Levy have already taken their bite. Why the gap between what the law permits and what the bank actually lends against? Simple. The Employment Act protects your dignity. The bank's debt service ratio protects its balance sheet. The two are cousins, not twins.
Meet Brian, a fictional but fairly representative marketing executive earning a gross Sh200,000 a month in Nairobi. Run his payslip through the Net Pay Calculator and PAYE, NSSF, SHIF and the Housing Levy shave that down to roughly Sh150,000 net. At a bank's 40 per cent affordability ceiling, Brian can safely carry a monthly instalment of Sh60,000, not the Sh90,000 his back-of-a-payslip-fold arithmetic first suggested.
Feed that Sh60,000 into a mortgage priced at around 13 per cent, roughly where Kenyan home loans sit in mid-2026, with the Central Bank Rate holding at 8.75 per cent since the Monetary Policy Committee's August 11 sitting, over a twenty-year term, and Brian qualifies for a principal of about Sh5.1 million. Run it yourself on the Mortgage Calculator if you doubt my arithmetic. Not the Sh8 million penthouse-adjacent unit in Kilimani he had bookmarked. Sh5.1 million, full stop. Punchier viewing in Ruiru or Athi River, perhaps, but a house he can actually keep.
And that Sh5.1 million is only the loan. Before Brian gets anywhere near the keys, the Kenya Revenue Authority wants stamp duty, 4 per cent of the property's assessed value in an urban area, 2 per cent if he goes rural, plus legal, valuation and registration charges that together routinely run 6 to 8 per cent on top of the purchase price. The Stamp Duty Calculator and the Property Legal Fees Calculator will do that sum before you fall in love with a listing, not after. Falling in love after is how Kenyans end up borrowing for the deposit and starving the emergency fund. The house does not care how you feel about it. The bank cares even less.
Closer home, cars behave differently, and worse. A car loan in Kenya today prices at roughly 13 to 16 per cent, with banks such as KCB financing up to 80 per cent of a vehicle's value over tenors stretching to 72 months. A mortgage, however slowly, tends to appreciate. A car starts depreciating the moment it leaves the showroom yard, girdled in that new-car smell that fades a great deal faster than the loan balance does.
Take Moraa the hustler, netting Sh80,000 a month after statutory deductions. At the more conservative 30 per cent ceiling many banks apply to asset-backed lending, her safe monthly instalment sits at Sh24,000. Run that through the Car Loan Calculator at a 15 per cent rate over five years and Moraa qualifies for just over Sh1 million, a decent, reliable, thoroughly unglamorous saloon. Not the Sh2.5 million SUV the dealership's sales agent, all teeth and cologne, swore she "definitely, definitely qualifies for, madam." He forgot to mention comprehensive insurance, which on an SUV that size runs considerably steeper than on the saloon Moraa can actually afford. Check the Motor Insurance Calculator before you sign anything. An unaffordable premium stacked on an unaffordable instalment is how a car ends up parked in the yard for six months while its owner walks to the matatu stage in protest.
Banks, to be fair, learn this lesson too, just slower and at far greater cost. Gross non-performing loans, the industry's polite phrase for loans nobody realistically expects to see repaid, stood at 14.6 per cent in July 2026, down from 17.6 per cent a year earlier but still fairly elevated by any sober banker's standard. Some of that pile is corporate mismanagement. Quite a lot of it, if we are honest, is Brians and Moraas who took the SUV the dealership recommended rather than the saloon the payslip could carry.
In these dying column minutes, let me leave you with the one instruction that outranks any interest rate: work out your own number, on the Loan Repayment Calculator or with a pen on the back of an envelope, before the bank works it out for you. Their number is designed to protect them. Yours needs to protect you.
Otieno's featherweights, the sensible ones anyway, eventually work this out too. They stop begging to fight in the heavyweight bracket and start winning fights in their own. Kenyan borrowers could learn the same trick. Pick the loan in your own weight class, and you might actually still be standing when the final bell rings.