The Mortgage Loan in Dubai

Ultramodern property situated in the fast-growing city is popular among both citizens and foreigners. The main grounds of this tendency include first-class quality of housing, proximity to the best resorts, a mild climate throughout the year, a rapid return on investment, and a rather high ROI index. However, due to rising prices, it is not always comfortable to pay the real estate’s entire cost at once. To date, it is not mandatory. Individuals intending to purchase property can take advantage of the opportunity to obtain a mortgage loan in Dubai. Our agency’s experts have prepared a mini-guide to the most popular types of mortgage programs in the UAE and the main features of applying for them.

The Dubai Mortgage Market’s Tendencies

According to REIDIN, annually, the number of purchase and sale deals carried out using a home mortgage in Dubai increases. Only in May 2024, 3,359 mortgage transactions were recorded, which was the highest figure in the previous 14 months. In the opinion of several analysts, the growing popularity of such loans may be caused by quite a high rental cost in the city’s sought-after neighborhoods. Many tenants decide to take out house loans in Dubai since mandatory mortgage payments have become comparable to monthly rent. In the first quarter of 2024, the total value of real estate purchased in installments amounts to AED 47,800,000, which is 52% more than in the same period in 2023.

Most mortgage transactions are concluded largely in relation to ready housing options. There are two primary causes of the trend: the banks’ reluctance to issue mortgages for off-plan Dubai homes and the availability of interest-free installments from developers for property under construction.

The Popular Programs of Mortgages in Dubai

The current banks' products include different loan programs. They are essentially divided into fixed-rate and floating-rate ones.

Fixed-Rate Loans

When issuing such a loan, the financial establishment offers an unchangeable rate for a particular term. The scheme lets the borrower not worry about the unexpected rapid rate increase. In most cases, the duration of the period doesn’t surpass five years. Then, the bank reviews the agreement’s provisions and establishes a rate higher than the Emirates Interbank Offered Rate. The EIBOR is counted by the UAE Central Bank. Such a mortgage suits Dubai property buyers who intend to pay back the installments in a short period.

Floating-Rate Mortgages

As the borrowing’s interest is computed based on the remaining sum owed, payments decrease every month. At the same time, the rate is able to alter immediately at any moment. It depends on diverse factors, including the property market’s current state, inflation, and EIBOR level. The borrower may either stay in the black due to a rate’s reduction or get in the red if it increases.

Conditions for a Mortgage Obtaining

In accordance with the current legislation, most mortgage companies and banks in Dubai give loans to both citizens and foreigners. They have developed a number of basic demands for potential mortgagees aimed at verifying their reliability and solvency.

• At the time of application, the mortgagor has to be 21 years old. Their age must be less than 65 at the moment of loan expiration. 
• Although several banks approve the installments to non-residents, the mortgages in Dubai with the best terms are available only to individuals with a residence visa.
• The applicant should possess a sufficient sum for the initial payment (about 25% or more, depending on the program’s terms) and accompanying costs.
• The mortgagee must have a stable income to repay a debt. The minimum revenue varies and is determined by the bank. It also depends on the mortgage’s size, but in most cases, it starts at 15,000 dirham.
• To get the best home loan in Dubai, the applicant needs to have an official job or conduct their own business in the country.

A Mortgage for Foreigners

Several Dubai banks can issue loans to foreign citizens. The demands for the potential mortgagors differ depending on the financial establishment’s rules. At the same time, it is hardly worth counting on getting the best mortgage loan in Dubai. 

• As a rule, banks finance only 50–60% of the purchased property’s value. 
• The individual who intends to take a loan has to insure their life.
• Banks place high demands on foreign citizens and propose reduced loan duration, larger monthly payments, a bigger down payment, etc.

Getting a Mortgage in Dubai

The process of receiving a debt consists of several stages.

1. 1. Firstly, it is necessary to choose a bank. Every financial institution establishes its own conditions for getting a mortgage. It is significant to apply to the bank with the most comfortable terms and a low interest rate.
2. 2. Secondly, the potential mortgagees must prepare documents. Most banks demand a package of documents including a passport, income and credit card statement, real estate documents, a visa’s copy, the confirmation of residence, etc.
3. 3. Thirdly, it is necessary to submit a well-executed application form for a home loan in Dubai for expats or migrants. This option is available online or at the bank’s branch. 
4. 4. Fourthly, the applicant should wait for a moment until the application is accepted, sign a mortgage agreement, and pay the down payment.

Obtaining a property mortgage in Dubai is not a facile process. It is enough to make a small mistake when processing documents or to miss one of the significant nuances, and the bank is able to refuse to issue a debt without any explanation. The best way out is to apply to a specialized real estate agency.

Golden Bee is a qualified team of property experts. If you intend to buy a dwelling in the UAE, you can count on our assistance with object selection, document preparation, and transaction carrying out. The agency’s experts will consult you on receiving a mortgage for residents or foreigners in Dubai and assist you in applying for a loan. We provide reliable and successful cooperation.