Dubai Real Estate Mortgages: Your Ultimate Guide

Dubai Real Estate Mortgages: Your Ultimate Guide

We’re going to be discussing everything about Dubai Real Estate Mortgages. So, if you’re looking to take a mortgage in the UAE, buying a property in Dubai on a mortgage, or want to know more, this episode is definitely going to be great for you.

Just to give you a background, I’ve been in the UAE for the last 19 years. Initially, we spent 17 years working with the real estate in the UAE. For the last two years, we’ve been working with many investors and national banks.

How Do Dubai Real Estate Mortgages Works?

So, first question to you is, how do Dubai Real Estate Mortgages works when they want to buy a property? Can they take a mortgage for an off-plan property or a ready property? How do mortgages generally work?

The majority of people take mortgages on a freehold ready property. It could be a leasehold property or a freehold property based across any of the Emirates here. They get a mortgage on that. Their eligibility depends on their income documents. They could be either a resident who’s based in the UAE or a non-resident who can avail a mortgage.

Mortgage Percentages for Residents

Okay, now let’s talk about residents. What is the percentage of mortgage a resident can get in Dubai, and for how long can that loan be?

Residents can get up to 84% if the property value is less than 5 million. If it’s above 5 million, then it’s 73% that they can borrow on the first property. The consecutive one will be 60% financed by the banks.

Loan Duration for Residents

And for how long does this loan last?

Primarily, the maximum is 25 years for a salaried individual until they turn 65 years of age, and for a self-employed individual, until they turn 70.

So, if someone is, say, 50 years old and salaried, they are going to get a 15-year loan until they turn 65. And if it is self-employed, then 25 years is the maximum cap.

Eligibility Criteria for Salaried vs. Self-Employed Individuals

What is the difference between the eligibility criteria for a salaried or a self-employed individual? How does it work?

The calculation parameters are different for a salaried individual. They look at the fixed salary that he or she is drawing from their employer and their liabilities. There’s something called a debt burden ratio, which is calculated for every individual when they approach a bank for any kind of borrowing, whether it’s a mortgage, credit card, or personal loan. For a salaried individual, it depends on their salary. For a self-employed individual, they look at the company profits and the share that is being passed on to them. There could be three partners; they derive the eligibility based on the share of the applicant.

Both self-employed and salaried individuals are eligible.

Dubai Real Estate Mortgages for Non-Residents

Now, this is for people living in the UAE, expats who are residents, and drawing a salary or have a business here. What about non-residents? There are a lot of people who buy properties in Dubai who don’t live in Dubai.

Non-residents can also avail of up to 60% financing. The bank looks at their home country documents. For example, if you’re based in the UK, they would ask for your personal account based in the UK, your utility bill to prove you’re actually staying in the UK, and a passport copy. They can do the loan based on these documents.

Loan Process Duration for Non-Residents

How long does this loan process take for a non-resident?

A pre-approval takes about 15 days because they need compliance approval. The whole execution or completion could take one and a half months to one month, depending on the paperwork.

Loan Process Duration for Residents

And it’s the same time for residents?

Residents can be done in three weeks as well because they have an Emirates ID, and everything can be checked much more easily.

So, for a non-resident, it takes about a month to a month and a half because the bank needs to understand why they are investing here, what their overall profile is, and whether they should open their account or not.

Mortgages for Companies

Are these mortgages only available to individuals, or are they also available for companies?

There are a few banks that do it in the company name as well. People form JAFZA offshore companies or DVI offshore companies and buy assets under that company name, which are primarily formed for a property management thought process. They buy 10 units, five years loans. However, loans are not that easy because not every bank is comfortable doing a loan when the asset is taken under the company name. But there are banks who work on it as well. It’s on a case-by-case basis.

Joint Ownership and Mortgages

If I’m taking a loan in my personal name but want to have a joint owner like my brother, sister, wife, or a family member as a co-owner on that property, is that possible?

Immediate blood relationships can be done, like your wife, son (if he’s above 21 years of age), sister, brother, or parents. But if someone is buying a property in their name and wants to put their kids who are below 21 as co-owners, that is not possible. You can buy the asset, but financing is difficult. There are legal repercussions when you give a loan where a minor is also an owner of a property.

Interest Rates in Dubai

Now, due to inflation and the interest rates globally going very high, what are the interest rates you’re seeing right now in Dubai?

Right now, the range is around 4.69% to around 6%. If a resident is taking a loan, it’s at 4.75%. A non-resident takes it at 5.5%. So, there’s a difference between a non-resident and resident rate. But people are still borrowing; the sales have not dropped. In the last year, interest rates have doubled up, but there is no negative impact or less supply in people applying for loans. People understand that the appreciation on the property is still at a higher pace than the interest rate increase.

Loan Based on Property Upgrades

Can people borrow money from the bank based on the property if they are looking at upgrading their properties?

Yes, that’s quite a normal practice right now, especially with high-end villas. People who have properties in places like Jumeirah Island or Golf Estate have older properties. They get them upgraded, and the bank releases equity against a quotation given by them for things like a pool, landscaping, or further cosmetic or additional modifications.

Percentage the Bank Will Fund

Is there a percentage that the bank will fund?

It purely depends. They will not cross the LTV parameters. So, if the property price is 10 million, the loan the bank will give will not cross 7 million. If the existing loan was 5 million, they could give 2 million for the upgrades.

Mortgages for Land and Construction

What about mortgage financing for people who want to buy land and build their own villa?

Banks will fund both the land and construction costs. This product is primarily given to residents because they want people who are based here. It’s difficult to monitor for non-residents. For a resident living in the UAE, they can get a mortgage for both land and construction.

Percentage for Land and Construction

What is the percentage on that? Is it the same 80%?

While buying the plot, they finance 50%. When they are doing construction, depending on the cost, the bank can do 100% as well.

Mortgages for New Residents

A lot of people are buying properties, taking golden visas, or becoming new residents and want to take mortgages for other properties. How does that process work? If a new resident becomes a resident today, does the bank give a loan immediately, or does the bank wait for some time?

It all depends on the client profile. If someone is high net worth back home and has a successful running business, they can still look at it on a case-by-case basis. Generally, they need continuity in their income in the country. At least six months in the country with income is needed to try to get a loan.

Mortgages for New Business Owners

If someone establishes a new business and becomes a resident, what happens?

We can take their income back home and try to structure it with the bank. It all depends on the profile. If they’re a high net worth individual, they likely have multiple sources of income back home. But for a startup, at least six months is needed because there has to be some recurring business to say they can repay the loan.

Multiple Mortgages on One Property

For example, in the UK and the US, people can take two mortgages on one property. Does that also happen in Dubai?

At the moment, it doesn’t happen. It’s the first degree mortgage that’s counted. There are corporate lending cases, like for a factory or warehouse, where there can be multiple banks involved, but not in normal residential cases.

Mortgages on Existing Property

If a person already has a property and wants to buy another property and take a mortgage, can they take a mortgage on their existing property?

If it’s fully paid up, they could get a mortgage against that, use the top-up amount, or the amount from the loan proceeds to buy an off-plan or ready property. They could give up to 80% depending on eligibility.

Mortgages for Off-Plan Properties

Do Dubai Real Estate Mortgages work for off-plan properties?

At the moment, it is still under discussion. Banks are reviewing it because they need to understand when they see the handover notice. They are more comfortable because that’s when the developer needs the payment. Some people want a mortgage for an off-plan property because it happens in other countries, but it is not very common here. For major developers, it can happen on a case-by-case basis.

Mortgages for Off-Plan Property with Payment Plans

If someone buys an off-plan property with a payment plan of 70/30, paid 70%, and now 30% is due for handover, can they get a mortgage for that?

Yes, the bank will initially give 30% for the handover of the unit, a title deed is issued under mortgage with the bank, and they can take a top-up on that mortgage. They can get the balance equity out and use it over there, depending on the LTV parameters approved.

Common Reasons for Mortgage Rejections

What are the main reasons for people’s mortgages getting rejected apart from eligibility criteria?

People often make mistakes in managing their finances with respect to the AECB report, which evaluates how they’ve been paying people on time. It includes utility bills, credit card bills, auto loans, personal loans, and mortgage installments. If people ignore utility bills, it creates a wrong impression. The bank feels that if someone didn’t honor a small payment, why would they honor the bank’s monthly installments?

Utility Bills and Mortgage Applications

Even utility bills affect taking a mortgage?

Yes, even a small bill shows that you are lazy or lethargic in paying. Check returns also impact people. Carelessness in managing funds in their account impacts their score.

Minimum Credit Score for Mortgages

Is there a minimum credit score required to go in for a mortgage?

Every bank has a different outlook. There is no standard. It depends on how the individual justifies the reasons for not paying the mortgage on time.

Mortgage Process and Fees

When someone wants to take a mortgage, how does the whole process work as a mortgage advisor? What are the fees involved?

Generally, a mortgage involves basic fees like processing fees charged by the bank, valuation fees, mortgage registration, life insurance, and property insurance. We share multiple proposals of the top banks for the client to analyze. We suggest which suits their requirement based on their income profile or industry. We get the pre-approval done, help finalize the property, get a final offer letter, and provide end-to-end assistance until the transfer is completed.

Life Insurance and Mortgages

Why is there life insurance attached to a mortgage?

Life insurance is there to cover the bank’s risk. If something happens to the borrower, the life insurance company would settle the mortgage with the bank, and the legal heirs would get access to the property.

Prepayment of Mortgages

Talking about mortgage settlements, if people want to prepay early, what is the general trend?

Every bank has a different slab available. Some banks offer 15% each year outstanding without penalty, another bank does 20%, and another 25%. The idea is people take a loan for 25 years but aim to finish it in 10 years. No one wants to drag a liability later in life.

Penalties for Early Mortgage Settlement

What is the maximum penalty if someone takes a loan and wants to foreclose after one or two years?

It’s one percent or ten thousand, whichever is lower, which is a standard for every bank.

Lease Rental Discounting

Is lease rental discounting also possible in the UAE?

Yes, but it happens for people who have multiple properties, like more than 10 units or complete buildings. The bank looks at rental income, deducts maintenance fees, and provides a loan based on that.

Restrictions on Multiple Property Mortgages

Is there a restriction on how many properties you can buy on mortgages?

As long as you qualify and have income to support the repayment, there is no concern. The first property gets more mortgage, the second less, but this also applies to non-residents. The maximum is 60% eligibility for non-residents.

Releasing Mortgage Charges

If someone had a mortgage and has already paid it off, and now wants to get the charge out, is it simple or complicated?

It’s simple. They need to go to the trustee office, get a release letter from the bank, pay a mortgage release fee, and get a new title deed. It takes a maximum of one hour.

Loan Buyouts

Are you seeing a lot of loan buyouts happening?

Yes, people on variable rates are moving to fixed rates to cap their installments because their income hasn’t increased.

Fixed vs. Variable Rates

What is good, fixed or variable rates?

Preferably fixed rates, because your installment doesn’t fluctuate, and you can plan accordingly. Variable rates fluctuate every three months or every month. Clients take a chance on their thought process.

How Variable Rates Work

How does a variable rate work?

The bank offers a fixed margin plus a three-month EIBOR. The installment changes based on the fluctuation in the three-month EIBOR.

Future of Interest Rates

Where do you see interest rates going?

I think it will stay at the same range for the next six to eight months, maybe 12 months, then start coming down.

Pre-Approval Process and Duration

How does the pre-approval process work, and how much time does it take? Does the client have to spend money for pre-approval?

Most banks are doing pre-approvals without any cost. As an end-user, you get a letter confirming your eligibility. It helps in negotiating and managing your budget. The pre-approval lasts for 60 calendar days. If it expires, we can revalidate it.

Timeframe for Final Loan After MOU

Once a person signs an MOU, typically how much time does it take to get a final loan?

If the seller doesn’t have a loan, it takes a month. If the seller has a loan, add 15 more days. People tend to keep an MOU for 60 days and target to end the transaction in 45 days.

Mortgage Registration Fees

What are the fees to register a mortgage?

There’s a mortgage registration fee of 0.25% of the loan amount. If it’s a loan of one million, then 2500. Plus, there’s a trustee fee charged during execution.


If people want to get in touch with you for more questions regarding Dubai Real Estate Mortgages, you can reach out to us at You & House Properties, or my email address is

Thank you so much for joining us, and it was great to have you on the show.

Frequently Asked Questions (FAQs)

Q1: Can non-residents get a mortgage in Dubai?
Yes, non-residents can avail up to 60% financing, depending on their home country documents.

Q2: What is the maximum mortgage duration for salaried individuals in Dubai?
The maximum mortgage duration for salaried individuals is 25 years until they turn 65.

Q3: Are mortgages available for off-plan properties in Dubai?
While not common, some banks may offer mortgages for off-plan properties on a case-by-case basis.

Q4: What are the penalties for early mortgage settlement in Dubai?
The penalty for early mortgage settlement is typically one percent or ten thousand, whichever is lower.

Q5: Is it possible to take a mortgage on an existing property in Dubai?
Yes, if the property is fully paid up, one can take a mortgage against it, depending on eligibility.

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