BEST Mortgages in UAE
Features with Benefits
We compare the best mortgages in UAE that is suited to your needs to help you make a better decision.
Compare Mortgages in Dubai and UAE 2021
Having a mortgage in UAE makes it easier to buy your dream home in the country. However, it is imperative to choose the right mortgage that aligns with your requirements.
And with tons of options and hyped-up marketing, often people end up making the wrong decision. This is why it is critical that loan seekers compare the options that they have to choose the best home loan for themselves.
And, Compare4Benefit is a comprehensive platform that is dedicated to helping people make smarter financial decisions. We provide you with a comparative list of the best mortgage products out there.
This way, you can look at multiple options, compare them, and make a wise decision.
Who Can Get a Mortgage in the UAE?
Expats can acquire a mortgage in UAE; however, they have to adhere to certain criteria. You must be employed in the current job for a minimum of six months or one year based on the lender’s requirement and the areas where you are buying the home.
Additionally, self-employed individuals can also get a loan granted that they have been running their business for a minimum period of two years.
It will be beneficial if they have an existing relationship with the bank as the officials will be more familiar with their situations.
There are some banks that will only accept applicants who are employed at certain companies. If you are employed at a multinational company, banking institution, or government department, then it will be easier for you to acquire a mortgage for your home.
Last but not least, it is imperative that you have a clean credit history while applying for a mortgage.
Lenders will reject applicants who have non-existent or poor credit files. Make sure you do not apply for a mortgage before checking your credit score.
And if you never had credit, then you should consider applying for a credit card and repaying the full balance every month to develop a positive credit history.
Whether you are looking for a villa or apartment, you must fulfill certain criteria to be eligible for a mortgage in dubai. Below are the eligibility criteria to avail home loan in Dubai –
- Applicants must be between the age of 21 and 65
- Individuals must be UAE resident
- Individuals must hold a monthly income of a minimum of AED 10,000 if salaried and AED 25,000 if self-employed
There are some banks that allow UAE residents to apply for a mortgage with a minimum salary of AED 8K, but it entirely depends on the banks’ policies.Eligibility Criteria for Expats
Expats in UAE must have a minimum salary of AED 10,000. Additionally, they need to make a down payment of at least 25% on property valuing at AED 5 million and 35% on property valuing over AED 5 million.
Top 5 Mortgage Rates in UAE 20211. RAKBANK Home in One
RAKBANK Home in One provides a combination of home finance and current account holding. The loan interest is calculated on a regular basis, and you can withdraw the money any time you want.
Moreover, the reducing rate stands at 2.69%, and it can fluctuate over the repayment period.
To avail of this loan, the minimum salary requirement is AED 15,000, and virtually, there is no cap on the mortgage you can take.
Moreover, you can take the loan for a maximum of 25 years, and you can invest in property in Abu Dhabi, RAK, and Dubai.
An important condition is that the concerned property must be ready, and you can only invest in an under-construction property.2. Standard Chartered Mortgage One
It is among the most reputed banks in the world, and you can ensure some of the best rates and features.
Under the Mortgage One scheme, the bank has set the reducing rate at approximately 3.49%, whereas the fixed rate is 2%.
The fixed-rate tends to fluctuate over the period of 25 years, which is also the maximum term. However, the rate will continue to hover around the mark of 2%.
The tenure of this mortgage will be shorter as most of the payment will go towards the principal amount instead of interest.
To acquire this loan, you must have a minimum salary of AED 10,000, and the bank can provide up to AED 18 million. You need to make a down payment of 20% on the property price.3. CBD Mortgage Loan for Expats
CBD is offering a profitable mortgage loan for expatriates. The bank offers a low fixed rate of merely 2.1% over the course of 25 years, with a reducing rate of around 2.99% per year.
There is a minimum salary requirement of AED 12000 for salaried individuals, and for self-employed individuals, this requirement exceeds AED 20,000.
The bank is ready to give you a loan of up to AED 10 million. However, the property must be complete to acquire the loan.4. Emirates Islamic Manzili Home Finance
The bank extends one of the lowest mortgage rates in the UAE. The fixed-rate is set at merely 1.81% that is adjusted for 25 years.
Moreover, the reducing rate is approximately 3.2% yearly. The minimum salary requirement for this mortgage is above AED 15000.
You must be salaried at your current job for over six months to opt for this mortgage. In addition to the mortgage, you will also get a credit card and a two-month installment deferment.5. United Arab Bank Home Finance for UAE National
The bank offers a low fixed rate at 1.69% adjusted for 25 years and a reducing rate of 2.99%.
Moreover, there is a minimum salary requirement of AED 15,000, and for self-employed individuals, the requirement stands at AED 50,000.
UAB is ready to give you a mortgage of up to AED 10 million on any property.
Step by Step Guide for Getting a Mortgage in UAE
Below is the step by step guide on how to acquire a mortgage in UAE – Go for the right lender
You will only get a home loan from banks that are registered under the Dubai Land Department (DLD). You can either hire a broker who will work on your behalf or directly contact the bank and enquire about their offers.
It is smarter to hire a broker as they have strong knowledge of the local market and available mortgages. Therefore, they will be better able to guide you as to where you should be looking.1. Choose the right mortgage
You will find different types of mortgage Dubai that mainly fall under two categories – fixed-rate mortgages and variable-rate mortgages. You must consider some important factors to select the right mortgage for you.
The type of property, the loan amount requirement, the down payment you can afford, etc., are some of the key considerations.
You can leverage the online mortgage calculator that almost all banks offer to get approximate the monthly installment that you are likely to pay.2. Get the Pre-Approval Letter
A pre-approval letter is referred to as an official letter that the bank issues, authenticating your eligibility to avail of the mortgage. Additionally, it also includes the maximum amount that you can borrow.
After applying for a mortgage, you should get the pre-approval letter within three to five business days.3. Select the Property
After you have received the pre-approval letter and have a budget, you can start looking for property in Dubai.
The letter is valid for 60 to 90 days based on the bank. Therefore, you have adequate time to choose the right property for yourself.4. Complete the Purchase
Once you have fixed your dream property, you can communicate with the banks to complete the mortgage agreement. However, prior to that, the bank will be appointing a property evaluator to check the market value of the property, and based on that, you will be offered a mortgage.
Once you and the seller agree on the price, you can move forward with paying the deposit and pick a date to finalize the transaction.
And on that predetermined date, the bank will release the mortgage amount to the seller. The overall process can take you approximately around 7 to 10 business days.
Types of Mortgages in UAE
There are different types of mortgage options for people in the UAE. And following are the options available in the UAE.1. Fixed-Rate Mortgage
In this type of mortgage, the rate of interest is fixed before the start of the loan term. Additionally, the interest rate also does not alter throughout the predetermined loan period, which is typically below five years.
However, there are some lenders who offer loan repayment at a fixed rate throughout the tenure of the loan. This system brings some definite advantages for the borrower. Having a fixed-rate mortgage makes it easier on the budget and plans the finances for the coming years.
Moreover, even if the market rate fluctuates and rates change, you have peace of mind.2. Variable Interest Rates
As the name suggests, in variable interest rates, the rate of interest can change throughout the repayment period. The interest entirely depends on the market condition. Therefore, there are chances that borrowers can get lucky and end up getting a profitable deal.
However, there are also chances that the market fluctuates, and they end up paying the higher interest rate. Borrowers with strong financial liquidity are the right candidate for this loan. This is because they will be able to deal with the financial implications of market volatility.3. Discounted Rate Mortgage
Under this type of mortgage, finance is offered depending on a standard variable rate. Financial lenders offer a certain percentage of discount on the interest rate for a specific period.
The discount is offered as a welcome or introductory offer. In some cases, discounted rate mortgages are a great option. However, the borrower should also consider that the discount only remains for a certain amount of time.
From a long-term perspective, you will find many other mortgages that save more money on the overall interest that you pay.4. Capped Mortgage
Variable mortgage rates are comparatively lower than fixed-rate mortgages. However, the issue with variable rates is that they are vulnerable to fluctuation, so borrowers can experience high or low anytime.
Such unpredictability can be highly stressful for some borrowers. A capped mortgage is another mortgage UAE that offers a better deal for the borrower. A maximum cap is set before the loan tenure.
And in case of the Eibor rate rises, the installments will not go above the predetermined cap. But the capped mortgage is only valid for a specific time period and offered as an introductory offer.5. Offset Mortgage
It is a rather new concept of mortgage in Dubai, which is provided by limited lenders. Under this type of mortgage, borrowers can link their savings, current, credit card, and the loan account together.
When some funds are added to any of these accounts, the loan amount gets deducted by the credited amount.6. Remortgage
A remortgage is a loan that is taken on the existing mortgage. It is simply transferring the existing mortgage to a new mortgage lender.
Remortgage is commonly reckoned as balance transfer and is available with a lot of lenders. The concept of this loan is helpful if the new loan is offered at a lower interest rate or you are in need of additional funds.
How to Use Compare4Benefit to choose the best mortgage?
At Compare4Benefit, we help you save a lot of time, effort, and money. We have created an extensive list of home loan options and organized it on a page.
So you can easily look out for the best Mortgage in Dubai.1. Mortgage UAE for Every Individual
At Compare4Benefit, we are associated with an extensive network of banks. Additionally, our team has harnessed the skills of home loan seekers to create a comprehensive and versatile list. We understand that every individual has different home loan needs and financial capabilities.
Therefore, we aim to provide a list that caters to the home loan requirement of various individuals. Whether you are looking for commercial or residential properties, our results will help you out.2. Saves Time, Money, And Efforts
Compare4Benefits makes it easier for you to choose the best mortgage in UAE in every aspect.
Traditionally, finding a home loan is a stressful task. You have to look out for companies that are providing a home loan, individually contact the bank and know about their home loan products, and then amidst a lot of unorganized information, make the decision.
Compare4Benefit has eliminated the stressful tasks so that it becomes easier to find the right mortgage.
We save a lot of time for you by providing a comprehensive list of different home loan providers. It not only allows you to save time but also money which you would have otherwise spent on traveling from one bank to another.
We also save you from making loan selection mistakes that often end up costing money in the future.3. Compare Mortgage for Your Needs
We have designed our platform to make the product comparison process quick, comfortable, and effective. Along with easy comparison of mortgages, we also make it efficient to apply for a mortgage as well.
Our system enables us to filter the options based on tenure, rate of interest, type of property, and many other features. By extensive, different choices allow you to select the best deals that cater to your distinctive requirements.
Calculate Your EMI with Mortgage Calculator
A mortgage calculator is quite easy to use and helps you determine the monthly mortgage than you would pay against your mortgage in UAE. The calculator determines your EMI based on certain factors, including the price of the properties, loan amount, interest rate, term of the loan, etc.
Moreover, the calculator allows you to change the numbers to see how differences in the factor will impact your monthly payments.
It will allow you to choose the price range that is best suited for your budget. Using the calculator is extremely easy; all you have to do is follow the below steps –
- Enter the property price that you wish to buy
- Enter the amount or % of the down payment that you have to pay
- Enter the rate of interest
- Enter the loan term that you prefer
- Click on the Calculate button, and the results will be displayed.
What Are the Documents Required for Getting A Mortgage In Dubai?
People who wish to avail of mortgage in Dubaimust complete the paperwork to initiate the application process.
The process of documentation varies from one bank to another. However, the following are the documents that banks generally ask when applying for a mortgage in Dubai:
- A copy of the Emirates ID
- A copy of passport and visa
- A salary certificate as proof of employment
- Bank statement and payslips for the last six month
- Proof of residence (DEWA bill or tenancy contract)
- The latest credit cards statement
Expat Friendly Mortgages in UAE
There are over 30 lenders in UAE, but not all of them offer loans to non-residents or expats. Moreover, foreign lenders are only allowed to conduct business in the UAE after the approval of the central bank.
The ones that are not recognized are now allowed to place a mortgage against the title deed of the property. This implies that if the borrower defaults, he or she will not be able to repossess the property.
Following are some banks that are offering mortgages to expats:
1. Emirates NBD- It is a Dubai government-owned bank that offers mortgages to expats up to AED 15 million. The loan is provided at a maximum of 75% loan-to-value. Additionally, a pre-approval facility is also available.
2. HSBC – This global banking giant also offers mortgages to an expat who has a minimum earning capacity of AED 15,000 per month. Additionally, the bank only provides a mortgage on certain developments. It allows overpayments, granted that the minimum overpayment is AED 30,000.
3. Mashreq – It is a bank based in UAE that offers loans to both residents and expats. Mortgage options are available for employed or self-employed expat earning a minimum of AED 15,000 per month. The maximum value of the loan provided by the bank is AED 10 million.
Mortgage Costs in the UAE
When applying for a mortgage in UAE, you have to pay multiple fees such as administrative fees, legal costs, etc. The exact amount of feed will differ based on the situation. On the whole, you should be prepared to pay the following fees –
- Mortgage registration fees which are 0.25% of the overall value of the mortgage
- Bank’s fees include insurance registration fees, processing fees, and property valuation fees.
- Mortgage life insurance or loan protection insurance (It is mandatory).
Mortgage Repayments in the UAE
Repayment mortgages are the primary type of home loan in Dubai. It focuses on paying a predetermined amount every month throughout the tenure of the mortgage.
You will generally pay by establishing a direct debit from the bank account on the same date of every month.
There is a less common option which is known as an interest-only mortgage. In this, you pay just a percentage of interest every month and have to pay the entire principal amount at the term’s end.
Considering the risky nature of the loan, it is often provided only for five years.
Refinancing a Mortgage in the UAE
The UAE mortgage market is highly competitive, with banks offering discounted fixed periods on mortgages.
This proves to be beneficial for homeowners who are looking to choose another deal as the people with existing mortgages often get the best deal.
If you are planning to refinance, first contact your existing bank.
Some banks may consider restructuring your loan with a decreased rate for a fixed term. Although some banks provide fee-free remortgaging, most of them charge certain fees to switch.
Earlier banks used to charge up to 3% buy-out fees. But the new rules introduced in December 2015 have set the maximum buy-out fees at 1% or up to AED 10,000.Related : Mortgage Refinancing UAE 2021
Frequently Asked Questions
1. Do Loan Lenders Check Your Credit Rating?
Your credit score is one of the important factors that determine whether or not your mortgage application will be approved. Your credit score determines your ability to repay your borrowing in a timely manner. People with a high credit score are likely to get easier approval on the mortgage application. Additionally, they are also likely to get better deals on their mortgage due to their creditworthiness.2. What Is the Role of Debt To Income Ratio?
Before your home loan application is approved, loan providers will comprehensively scrutinize your financial status that includes the debt to income ratio. Your debt to income ratio should fall under 50%.3. What Is a Pre-Approval Letter?
It is official documents that are issued by the bank that ascertain that you are eligible for housing finance. It highlights the maximum amount you can borrow from financial lenders. Once you have applied for the mortgage, you are likely to receive this letter within three to five business days. Once you receive the letter, you can start to look for your dream home in Dubai.4. What is the maximum home loan period in the UAE?
The maximum home loan period for UAE nationals is 25 years, whereas 15 years for expats or non-residents.5. How to calculate the eligibility amount for a mortgage?
Typically, applicants’ income plays an important role in deciding the overall loan amount. The calculation centers on the rule that around 25% to 28% of the income is needed to pay the EMI.6. What is the mortgage financing cap in UAE?
The mortgage financing cap is up to 85% of the value of the property for UAE nationals, whereas 80% of the property value for the expats.7. Are real estate taxes included in a home loan?
Property tax is generally added to the EMI. However, it can be excluded based on the understanding between the creditor and lender. Nevertheless, you should include the tax in the payable.8. Can foreigners buy property in Dubai?
Foreigners have many options to buy property in Dubai. They need to look for freehold areas wherein the property can be easily purchased by expats. Additionally, they can also get a mortgage up to 80% of the value of the property.9. Can one get two home loans at the same time?
You can get multiple home loans from financial institutions in the UAE. But you must have income eligibility and good credit history.
How to Choose the Best Mortgage for Yourself
Want to get on the mortgage ladder but don't know where to start? Take a look at our useful mortgage guides.
- Mortgage Rates in UAE 2021
- 9 things to know before applying for a mortgage in UAE
- Mortgage Refinancing UAE
- Debt Consolidation in UAE
- Non-residents guide to buying a property in UAE
- Dubai Land Department Mortgage Fees
- Mortgage mistakes first time home buyers should avoid
- Loan Against Property Dubai
- Rent to own schemes in Dubai