So, you have decided upon purchasing a property in Dubai, a fantastic idea. You are in luck as properties in Dubai come with various options for financing including post-handover payment plans, mortgages, and different payment methods. Although a significant share of the property market in Dubai is transacted in cash the market had experienced an all-time high of mortgage purchased properties in 2021, with the figure reaching a total of DH127 billion, exceeding previous records.
It is advisable to shop around and compare rates to find the best solution which fits your situation. If you’re an expat in Dubai and this is your first mortgage, typically, you can borrow up to between 80-85% of the property value, provided the property value is below AED 5M. UAE Nationals are able to borrow slightly higher.
The majority of major banks in Dubai offer home loans, so you can find yourself spoilt for choice, but each bank will have its own terms and conditions. Audrey’s International has excellent relationships with many banks and lenders and can assist you throughout the entire process to secure the dream property.
Who is eligible for a mortgage in Dubai?
FIXED-RATE MORTGAGE
The interest rate will be set for you and will not change throughout the agreed period, this is usually under five years. However, you may find yourself a lender providing a fixed rate for the loan’s lifetime. With a fixed-rate mortgage, you can plan your financial outlays easier and you will not need to pay more in case of an increase in interest rates. However, if interest rates go down you won’t be able to take advantage of this.
OFFSET MORTGAGE
An offset mortgage is very interesting as it links a traditional mortgage to a deposit account. Therefore, the more money in this deposit account the less your interest payments towards your mortgage. This is a fantastic opportunity providing liquidity and lower mortgage payments to those who can save money or tend to have larger amounts of money in their account at any time. You can still access your money in the deposit account at any time, without any restrictions.
Mortgage costs
When purchasing a property with a mortgage in Dubai, you will be required to pay a mortgage registration cost of 0.25% of the loan value. You may also be required to pay the lender a fee as well as the valuation fee and mortgage protection insurance.