Best Home Loans UAE: Complete Guide


Dubai is a place where you will find people from all around the world living there and sharing their cultures. You will find so many expatriates living in this city, making it expansive. If you have planned to make a real estate investment, you should go for a good property in a good location. And you will find some great options that align with your needs and financial preferences. One of the biggest steps in buying a property is getting a loan. Although there is no dearth of options for expatriates to get home loans UAE, they need to follow a procedure to avail the same.

Who Can Take Home Loans UAE?

Whether you are looking for a villa, townhouse, or apartment, you can get a home loan for your every need. If you fulfil the eligibility criteria, then you can apply for home loans UAE. The criteria include –

  • For a salaried individual, he/she should be between 21 and 65 years old and if the applicant is self-employed, the age limit extends to 75 years.
  • Having a monthly income of AED 12K is salaried, and AED 25K is self-employed.

As per the Dubai mortgage law, expats can avail of a home loan of up to 80% of the overall value of the property they want to purchase. This means 20% of the property value will be the initial deposit for a property below AED 5 million.

Moreover, off-plan property mortgages in Dubai have slightly different loan caps. The minimum cash you need to pay as a down payment is determined by the purchase value of the property and the resident status of the buyer.

  • The UAE Mortgage law requires expats to have a down payment 20% of the property value. For UAE nationals, they have to pay 15% down payment upfront, including associated purchase costs. for expat residents.
  • For property above AED 5 million, the down payment is 30% and 40% if it is your second or third property.

What Guidelines Expatriates Must Fulfill To Get Home Loans In Dubai?

Financial institutions must comply with certain criteria to offer home loans UAE. They follow a procedure; the following aspect of the expat is assessed –

  • Credit history
  • Time spent within the UAE (Generally 6 years)
  • Length of employment in the UAE
  • Business period spend in UAE (Ranging between 2 and 3 years)

Adhering To The Pre-Requisites

Home loans or mortgages are a popular and common phenomenon in every city, and Dubai is no different. There are different kinds of home loans UAE that are offered in certain conditions, along with the ones mentioned above. First, you should figure out the amount you would have to pay upfront. Secondly, based on the mortgage duration, you should consider whether to choose a fixed interest rate or variable interest rate. These are two important considerations that every expats should look into when buying a home loan UAE.

Upfront Cost

When buying a property, you have to pay a certain amount upfront. Along with the down payment for the property, you would also have to take care of registration fees, transfer fee, valuation fee, real estate commission. Here is a cost breakdown of all these things:

  • Down Payment – 20% of the purchase price for property under AED 5 million.
  • Transfer fee – 4%
  • Mortgage registration fee – 0.25% of the finance value
  • Real-estate commission – 2% but can vary
  • Valuation fee – between AED 2,500 and AED 3000.

Some banks in the UAE also allow expats to add three-quarters of the overall purchase fee for the mortgage loan they are taking.

Pre-Approval Of Mortgage

Before you set out for a house hunt, you should get pre-approval for a mortgage. This will help you to narrow down the search based on your specific budget. Additionally, when signing the sales agreement, you will need to give a cheque amounting to 10% of the overall purchase price. So if you do not get financial approval and the bank later refuses to finance you, then you will end up losing the deposit amount you have paid to the bank.

Valuation Clause Of Sales Agreement

Make sure to assess and check whether or not your property has a valuation clause. Before offering home loans UAE, banks perform a thorough assessment and of the steps in property evaluation. If, during this process, the property value comes as overpriced, the bank may adjust the finance amount as pee the valuation of the property. This is where the valuation clause will protect the deposit you have put up with the bank. The valuation clause is basically a provision in the sales agreement that highlights the amount you will receive from the bank in case a hazardous event occurs.

Repayment Value

Generally, the repayment value of the bank depends on the monthly income. In normal circumstances, the repayment value is not more than 50% of the monthly income. Furthermore, if you also have other loans, the overall amount is deducted from your calculations. Each bank has a unique formula to calculate an applicant’s borrowing capacity.

Duration Of The Home Loans Dubai

Whether you are a resident or expat, you need to be under a specific age threshold to acquire home loans in UAE. Home loans are offered for a maximum of 25 years in the UAE, wherein for salaried individuals the age limit is 65 years, and for a self-employed individual, the age limit is 70 years. When you increase the duration of the loan, you will have to pay lower EMIs, but it increases the interest amount. Moreover, your borrowing capacity also increases when you choose a long-term mortgage in Dubai.

Another option is to choose the longer-term loan and reduce the duration by paying an extra amount every year. Without a penalty, you can repay 10% extra of the principal amount every year. Make sure you get professional assistance so that you can be more informed about your options and make well-informed choices.

 How Are Home Loan Rates In Dubai?

Interest on home loan UAE can vary between 2.10 and 5%. Presently, the rates are lowering and reported to lower even further in the coming times. However, these rates are extremely volatile. If you choose a fixed rate, then it will remain the same for two years. Post this period, banks will apply for a revision payment. If you have paid a lower upfront payment, the revision rate could be higher. Although you can get a fixed rate for five years, you will have to pay a higher rate of interest. The interest rate could come between 2.99% and 3.25%.

Furthermore, variable interest rate home loans are another option that expats should be looking at. However, it can be a trick to predict the overall money you will be paying through the course of the loan tenure. When we are dealing with a variable interest rate mortgage, it becomes impossible to perform accurate budgeting.

But if you have a good market understanding and feel that in the future, the interest rate will go down, then choosing variable interest means that you will be paying less. But you cannot base the decision merely on your intuition, as things can go south anytime. Your predictions may turn out to be wrong, and the interest rate could increase. And if that happens, you may or may not be prepared for financials. So, these are critical choices that you need carefully after doing thorough research on your part.

 Switching Between Mortgage Providers

In recent times, the process of switching between lenders has become easier. The penalty for this is capped at AED 10,000. However, earlier, you had to pay 5% of the overall amount. If you have good negotiation skills, then you can convince banks to provide you with more profitable terms based on the market conditions. When it comes to assessing home loans UAE and taking the best decisions, you have to be proactive and well informed. With smart research and decision making, you can get a great deal on your home loan.

What Are The Types Of Home Loans UAE?

Banks have come up with different kinds of home loans UAE with distinctive features, benefits and interest rates. You will find a home loan for a wide range of finance requirements:

Fixed-Rate Mortgage

It is a popular and traditional type of mortgage available in the UAE. As the name suggests, the interest rate of the loan remains the same across the loan tenure. And this rate will be predetermined during the loan approval process, which will be adhered throughout the period of the loan.

At home financial institutions, the fixed rate will not stay the same throughout the tenure of the loan. Lenders may charge you with a fixed rate for a particular period then charge a variable interest rate based on the Emirates Interbank Offered Rate (Eibor).

Discount Rate

In this type of mortgage, finance offers depend on the standard variable rate. Lenders offer a specific percentage of discount on the particular interest rate – for instance, 0.5% off for the first three years. Moreover, this discount is offering a welcome or introductory offer. Looking at the feature, this may look like an attractive mortgage, but it is expensive, and the discount remains active for a specific time period.

 Variable Rate Mortgage

It is the exact opposite of a fixed-rate mortgage. It continues to fluctuate on a regular basis. The rate can rise or fall as per the Eibor. However, some lenders have a standard variable rate which is lower than the fixed rate. And, the calculation of the interest rate can differ as per the type of mortgage. If you are considering going for a variable rate mortgage for your property, then you have to be prepared to deal with fluctuations as it will definitely influence your monthly expenses.

 Capped Mortgage

The rates of variable mortgage are lower as opposed to its counterpart, fixed-rate mortgage. However, variable rates can be highly volatile as they tend to increase or decrease at any time. It can put you in a stressful situation time and again.

To make things more efficient, financial institutions offer an option known as a capped mortgage. The maximum cap is predetermined, and if the rates of Eibor increase, your monthly instalment you are paying will not exceed a predefined cap. However, this type of mortgage is only valid for a specific time period as a welcome offer.

Offset Mortgage

This is a rather new home loan concept in the UAE, and not many lenders offer this kind of loan. In an offset mortgage allows the loan holders to link their loan account with a credit card account, current account, and savings account. Whenever funds are added to any of the linked accounts, the overall value of the loan amount gets reduced by that amount.


A remortgage is basically acquiring a mortgage loan on the current mortgage or transferring your existing mortgage to a new lender. This is also known as balance transfer in the UAE. The loan can be acquired from the same lender or a different lender. The phenomenon of remortgage is only beneficial if the new loan you are getting is offered at a lower interest rate or you are getting additional funds.

What Are The Documents Needed To Acquire A Home Loan UAE?

To apply for a home loan in the UAE, you have to first fill the application form. Subsequently, you will need to submit certain paperwork required by the bank. The kind of documents you will need to submit will differ from one bank to another. However, generally, banks require you to apply for a home loan with the following documents:

  • A copy of your Emirates ID
  • A copy of your passport and visa
  • A salary certificate verifying employment
  • Proof of residence like DEWA bill, tenancy contract
  • The latest credit card statements
  • Bank statement and payslips for the past six months.

Final Thoughts

To avail of the home loan, you must apply with a bank that is registered with the Dubai Land Department to be valid. You can either direct liaise with the bank or go through a broker.

There are various types of mortgages in Dubai, and largely they fall under the categories of fixed or variable rate mortgages. To choose the right mortgage, you should consider the following factors the amount of loan you require, your lifestyle, the property type you want to purchase, and the cash deposit you can afford. And once you have gotten the pre-approval for your loan, you can look for a property that is perfect for you and your family.



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