Mortgages in Dubai: modern financing for investors and residents

Financing is available to both:

• UAE residents (people who hold a residence visa),
• non-residents who want to invest in the local property market.

Banks accept applications from both employees on an employment contract and the self-employed.

BASIC BANK REQUIREMENTS

Most banks require:

• a minimum monthly income of AED 15,000,
• an average account balance of around AED 50,000, maintained for 3 to 6 months before applying,
• documented sources of income (employment contract, business contracts, financial statements and so on).

INTEREST RATES AND REPAYMENT TERMS

Mortgage interest rates in Dubai are similar to the models known in Europe:

• for the first 2 to 5 years a fixed rate may apply,
• after that it becomes variable, based on the 3 month EIBOR (Emirates Interbank Offered Rate) plus the bank’s margin.

This gives investors stability at the start of the loan and flexibility later on. In practice, current mortgage rates in Dubai are around 4 to 6 percent, depending on the bank’s offer, the client’s creditworthiness and the type of property being financed.

LOAN TO VALUE AND DOWN PAYMENT

The level of financing available depends on the borrower’s status:

• residents can obtain up to 80 percent of the property value,
• non-residents, up to 60 percent of the property value.

The rest is the investor’s down payment.

FINANCING OFF-PLAN INVESTMENTS

For property under construction (off-plan), a mortgage can be obtained after the project is completed, that is once the building is handed over. In practice this means the bank usually finances the last and largest instalment of the payment plan, which makes a mortgage an excellent complement to this type of investment.

For many investors a mortgage is not only a way to finance a purchase but above all an effective tool for managing capital.

With financing available on attractive terms you can:

• increase your investment leverage,
• keep your liquidity,
• diversify your property portfolio,
• benefit from rising property values in Dubai’s dynamic market.

Summary

A mortgage in Dubai is a flexible tool that is increasingly used by international investors. It makes it possible to buy premium property with a limited down payment, offering stable interest rates and long term repayment conditions.

If you want to find out which financing option best suits your needs, get in touch with us and we will help you go through the process of obtaining a loan step by step.