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Mortgage Interest Relief Calculator Kenya

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Mortgage Details

*Eligible interest is capped at KES 30,000 per month (KES 360,000 per year)
Monthly Tax Savings
KES 6,000
Tax savings from KES 20,000 eligible mortgage deduction at marginal 30% PAYE rate
Reduced PAYE Tax
KES 14,583
Net Pay Increase
KES 75,167

Comparison Overview

Metric No Mortgage Relief With Mortgage Relief Savings
KRA PAYE Tax KES 20,583 KES 14,583 KES 6,000
Net Salary KES 69,167 KES 75,167 +KES 6,000

What is Owner-Occupier Mortgage Interest Relief?

In Kenya, individuals who borrow funds from approved financial institutions to purchase or construct their owner-occupied residential home qualify for Mortgage Interest Relief under Income Tax Act Cap 470 s.15(1)(b). Qualifying mortgage interest is deductible from taxable employment income up to a statutory limit of KES 30,000 per month (KES 360,000 per year), directly reducing the PAYE tax you pay at your marginal tax bracket.

Mortgage Interest Tax Relief in Kenya (2026)

Under the Income Tax Act Cap 470 s.15(1)(b), Kenyan resident employees who pay qualifying mortgage interest on their owner-occupied home can deduct that interest from taxable income, up to KES 30,000/month (KES 360,000/year). This directly reduces your PAYE-taxable income, resulting in substantial income tax savings.

How does mortgage interest relief reduce PAYE in Kenya?

Qualifying mortgage interest (up to KES 30,000/month) is deducted from your gross salary alongside NSSF before PAYE tax bands are applied. This reduces your taxable income. For example, if you pay KES 20,000/month in mortgage interest and earn KES 100,000 gross, your taxable income drops from KES 94,000 to KES 74,000, saving you KES 6,000 in PAYE per month (since the deduction falls in the 30% marginal tax bracket).

What qualifies for mortgage interest relief in Kenya?

To qualify, the mortgage must be taken out with an approved financial institution (licensed bank, building society, insurance company, or registered SACCO), the property must be the employee's own residential home in Kenya, and the loan proceeds must be utilized to purchase or construct the dwelling. Commercial and buy-to-let properties do not qualify.

Is the KES 30,000 mortgage relief limit monthly or annual?

The statutory deduction limit is KES 30,000 per month (KES 360,000 per year). If your actual monthly mortgage interest is less than KES 30,000, you deduct the actual interest amount paid. If it exceeds KES 30,000, your deduction is capped at KES 30,000 for that month.

Related Kenya Tax Calculators

Kenya Tax Calculator Hub → PAYE Calculator Kenya → Net to Gross Salary Calculator → Kenya Payslip Calculator →

Disclaimer: These calculations are estimates based on 2026 KRA statutory rates and are provided for informational purposes only. CenterBoard is not affiliated with KRA or any government body.