dfcu launches home loan product

What the report says

dfcu Bank has introduced a home loan product in Uganda with an advertised annual rate of 16.9% and a 60-day repayment holiday. The launch comes shortly after the Bank of Uganda kept its Central Bank Rate at 12%, while warning that borrowing costs could rise further as the shilling weakens. The central bank has said lending rates were already elevated in the recent quarter and may edge up.

According to the bank statement cited by The Observer, the offer allows customers to borrow up to 85% of a property’s market value and repay over as long as 20 years. dfcu said it will finance the insurance premium, confirm qualifying applications within 48 hours, and requires those building homes to contribute at least 30% of construction costs. The bank said the product is intended to ease upfront expenses such as deposits, valuation, insurance and other transaction fees.

The offer is broader than standard mortgages. It covers completed homes, land, construction, renovations, refinancing and equity release, and also allows investors to finance up to eight rental units on one title. The bank said eligible borrowers include salaried and self-employed clients, diaspora Ugandans with verifiable income and expatriates working in Uganda on valid permits.

dfcu also said it has partnered with several property developers and agents to reduce transaction costs for some buyers. A home loans manager quoted in the report said the bank wants customers to take on repayments at levels they can manage over time. The move reflects wider pressure on would-be homeowners as interest rates and other housing costs remain high.