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A new TSC car loan and mortgage fund for staff of the Teachers Service Commission (TSC) Secretariat would lend at 1.5% a year, under draft regulations published by the National Treasury. The fund would start with KSh640 million in TSC savings.
The draft Public Finance Management (Teachers Service Commission Secretariat Staff Car Loan and Mortgage Scheme Fund) Regulations, 2026, cover Commission employees, not teachers in schools. The Treasury has invited comments by 8 December 2026.
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How the TSC car loan would work
- The car can be no more than 10 years old from the date of manufacture.
- The loan covers 100% of the car’s value or sale price, whichever is lower.
- Repayment is within six years.
- Only one car loan at a time, and a new one only five years after the last.
- The car is jointly registered to the fund and the borrower, needs comprehensive insurance, and cannot be used for business.
At 1.5% a year, the TSC car loan rate is far below bank pricing; compare it with our list of car loan interest rates at 23 banks.
Mortgage terms in the draft
| Term | Draft rule |
|---|---|
| Uses | Buy, build, improve or release equity on a home, or buy land and build |
| Financing | 100% of property value or price (lower of the two); 90% for construction |
| Repayment | Up to 20 years for homes, 10 years for land, or remaining years of service if shorter |
| Limit | Subject to the 67% pay commitment limit set by the Salaries and Remuneration Commission |
| Leasehold | Lease must have at least 35 years left |
Staff on permanent and pensionable terms or fixed-term contracts would qualify. Borrowers could pledge retirement benefits as security to the extent the Retirement Benefits Authority allows, and would need mortgage protection and fire cover. A second mortgage would only be allowed two years after the first is cleared.
Bank home loans currently start at about 9%, as shown in our mortgage rates comparison for 28 banks.
What borrowers would pay
Interest would be charged at “one point five per centum per annum on the monthly reducing balance”. A bank or financial institution appointed to run the fund could add up to 1.5% to cover management costs, also paid by the borrower. If a borrower defaults, the bank can sell the property and the fund covers any shortfall.
The fund would be run by a committee whose members serve three-year terms, renewable once, and could also receive money from Parliament, interest earnings, grants and donations.
How to comment on the TSC car loan rules
Comments go to the Treasury Principal Secretary by post, hand delivery or email by 5pm on 8 December 2026. A public meeting for the general public and TSC Secretariat staff is set for 10am on 1 December 2026 at the Kenyatta International Convention Centre, Nairobi.
Once finalised, the rules need National Assembly approval. Those comparing other home finance options can read our guide on how to get a mortgage in Kenya or the KMRC single-digit mortgage scheme.
Frequently asked questions
Who qualifies for the TSC car loan and mortgage fund?
Employees of the Teachers Service Commission Secretariat on permanent and pensionable terms or fixed-term contracts. It does not cover teachers employed in schools.
What is the interest rate?
1.5% a year on the monthly reducing balance. The bank running the fund may add up to 1.5% for management costs.
How much money will the fund start with?
KSh640 million from Teachers Service Commission savings.
When is the deadline for comments?
5pm on 8 December 2026. A public meeting is set for 1 December 2026 at KICC, Nairobi.
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