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Know everything about Mortgage and Home Loans in the UAE

The UAE, of late is fast becoming a destination of choice for the many expats who want to invest in its lucrative real estate market. Local Emiratis too are keen to invest and are looking for suitable opportunities primarily in the city of Dubai and Abu Dhabi. Nevertheless, buying a property is always going to be expensive.


But then, there are suitable alternatives and the mortgage market in the UAE is very dynamic and thus, presents you with a lot of options.

Almost everyone capable of providing ample proof of having a sufficient income is entitled to apply for a mortgage. It doesn’t matter if you are a local resident or a foreign expat.

Of course, there are a few things that you must comply with.

Let’s begin by understanding the eligibility criteria.

What you must do to fulfill the eligibility criteria?

Unless you are in a position to meet the minimal requirements, it would be futile to avail a mortgage to buy a property. On that front, you need to quality by meeting the conditions listed below:

  • Minimum monthly income should be in the range of AED 8,000 to AED 15,000
  • Keep in mind the monthly installments you pay should not exceed 50% of your monthly income
  • The loan period you are presented with is a maximum of 25 years
  • Only those in the age group of 21- 65 years (expats included) are considered eligible. The only exception offered is to Emiratis who are over 70 years
  • As per UAE Etihad credit bureau, having a clean credit history is also a must

How much you can borrow?

Borrowing in many ways is capped and is governed by some basic factors, which includes the following:

Maximum LTV (Loan to Value)

  • If the property value is less than AED 5 million
    - 80% for the first mortgage
    - 65% for the second mortgage and onwards
  • If the property value is greater than AED 5 million
    - 70% for the first mortgage
    - 65% for the second mortgage and onwards
  • Expats and non-residents of the UAE are considered eligible for a maximum loan to value ratio of 50%
  • In some other instances, a few private banks do finance off plan projects after 50% completion, and, as such offers 50% LTV
  • To increase the chances for eligibility, joint applications are also allowed( in the case of siblings, couples & business partners)

What about the necessary documents?

To be in a position from where you can secure the mortgage, it becomes necessary to provide the basic documents, based on your individual capacity.


For salaried individuals:

  • Application form, consent letter & authorization letter for bureau check
  • National ID or valid passport, residence visa & Emirates ID
  • Original bank statement for the past 3 months for new customers
  • Salary certificate

For Self Employed:

  • Application form, authorization letter for lending and consent letter for bureau check
  • Copy of Trade License, Chamber of Commerce Registration, Memorandum & Articles of Association
  • Original 12 months statements of company and personal bank account for new customers

For Expats:

  • A copy of your passport
  • Proof of residence in the UAE and proof of current address
  • Financial statements such as proof of salary, bank documents, and tax returns

Making sense of Mortgage Rates

To start with, making sense of how mortgage works is an entirely difficult task. At times, it can be complicated. However, for your benefit, we are trying to breakdown the overall cost.

Long Term Rate: Base Rate + EIBOR (Emirates Interbank Offered Rate)

- Base rates may vary from bank to bank. Moreover, EIBOR is standard across banks and is normally published and regulated by the Central Bank of the UAE

Short Term Rates: Most of the banks in the UAE do offer a fixed rate for short term duration, which generally ranges in between 1 to 3 years.


By and large, being a customer, you must focus more on the long term rate. In doing so, you stand to benefit the most, as the popular adage clearly says” the lower the base rate, the better the mortgage.”

A few important things you must consider

  • Mortgage pre-approval is valid between 30-90 days and that too on the basis of the bank
  • Property valuation cost is usually from AED 2,500 to AED 3,000, again, depending on the bank
  • In the event, where your mortgage advisor might ask you to inflate the property purchase price, please refrain from doing so. Getting higher LTV by unethical means is illegal and it does not help the matter by any means. On the contrary, this might result in a situation, where your property valuation might get negative rankings
  • Even before searching for a suitable property, it would be a good idea to get the pre-approval done. This will give you some extra leverage, while negotiating for better terms with the seller.
  • Some additional expenses that you are likely to incur involve the likes of loan processing fees, valuation fees and property insurance.

The UAE property market is gaining a lot of traction and is popular with most of the foreign expats. So, when it comes to investing in the property market, irrespective of your nationality, mortgages are offered by local as well as international lenders.

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