How to compare mortgage offers in the UAE

How to compare mortgage offers in the UAE

Comparing mortgages in the UAE involves looking beyond the advertised interest rate. The true cost of a loan includes fees, profit margins (for Islamic loans), and early settlement terms. Buyers should also factor in insurance, registration charges, and property valuation fees.

Key elements to compare

• Interest or profit rate: Compare fixed vs. variable rates. Islamic loans list “profit rates” instead of interest.

• Loan-to-value ratio (LTV): Nationals can borrow more than expats. Make sure your down payment meets the rules.

• Fees: Common charges include processing (1% of loan), valuation (~AED 3,000), and early settlement (~1%).

• Insurance requirements: Life and property insurance are typically mandatory and sometimes bundled by the lender.

• Redraw/repayment flexibility: Check if you can make extra payments or exit early without penalty.

Use platforms like yallacompare, Souqalmal, or compareit4me to benchmark offers across banks like Emirates NBD, ADCB, FAB, and Dubai Islamic Bank. Always read the Key Facts Statement (KFS) and request a full amortisation schedule before committing.

Tips to get the best deal

Improve your credit score, reduce debt, and have a clean financial history. Negotiating better terms is easier if you have a strong relationship with the bank or bring multiple offers. Bundling other financial products like accounts or investments can also unlock better rates.

Understanding mortgage types in the UAE

Understanding mortgage types in the UAE

In the UAE, mortgages are offered to both UAE nationals and expatriates, though eligibility, LTV (loan-to-value), and terms differ. Buyers can choose between conventional and Islamic mortgages, as well as between fixed and variable interest rates. Banks and Islamic finance institutions are regulated by the Central Bank of the UAE, ensuring a consistent framework for borrowing.

Main mortgage options in the UAE

• Fixed-rate mortgage: Locked-in rate for 1–5 years, providing payment stability. Often reverts to variable after the fixed period.

• Variable-rate mortgage: Interest rate fluctuates with EIBOR or lender benchmark. Can be riskier but cheaper initially.

• Islamic mortgage (Murabaha/Ijara): Sharia-compliant, asset-based financing where the bank buys and leases the property to you with a profit margin instead of interest.

• Buyout mortgage: Refinance an existing home loan to get better terms or consolidate debt.

• Offset mortgage: Links your mortgage to a savings/current account. Interest is only charged on the outstanding difference.

Islamic mortgages are popular due to Sharia compliance, especially among Emiratis and Muslim expats. Fixed-rate loans appeal to those wanting budgeting certainty, while variable rates offer flexibility. Nationals typically enjoy higher LTV (up to 85%), while expats are capped at 80% for first homes and 65% for second properties.

Who can apply for a mortgage in the UAE?

Both salaried and self-employed applicants can apply. Most banks require a minimum monthly income of AED 15,000 (salaried) or AED 25,000 (self-employed). Non-residents can access mortgages with select banks, though conditions are stricter. Required documents include valid passport, Emirates ID or visa, salary certificate, payslips, bank statements, and property documents.