Mortgage loans2020-05-15T13:18:20+00:00

Mortgage loans

Over the years, UAE has gained popularity as a destination for the expatriates, especially in Abu Dhabi and Dubai (as these Emirates are business-friendly). To align with such a trend, the UAE mortgage market has grown to become well established, with the local and international lenders providing the expats with home loans.

Both buy to let mortgage, as well as a residential mortgage, is being offered to the expats in the UAE. The loan criteria, however, may differ from lender to lender and borrower to borrower.

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ABOUT MORTGAGE LOANS

What is a Mortgage Loan?

A mortgage loan is a kind of secured loan, which is offered by banks or other financial institutions against the borrowers’ residential or commercial property. The borrowers can use the amount collected by keeping the property in the form of collateral until the repayment of the loan for different purposes such as the expansion of business, payment of medical expenses, funding their kids’ education, and much more.

Mortgage UAE

Over the years, UAE has gained popularity as a destination for the expatriates, especially in Abu Dhabi and Dubai (as these Emirates are business-friendly). To align with such a trend, the UAE mortgage market has grown to become well-established, with the local and international lenders providing the expats with home loans.

Both buy to let mortgage, as well as a residential mortgage, is being offered to the expats in the UAE. The loan criteria, however, may differ from lender to lender and borrower to borrower.

Features & Benefits of Mortgage Loans UAE

Here is a quick rundown on the features & benefits of mortgage loans to see what makes them so popular amongst the UAE  residents.

  1. Many banks in the Emirates offer two kinds of mortgage loans- fixed and variable.
  2. When the borrowers finance the purchase of their house through a mortgage, they tend to go in for a long-term commitment.
  3. The deposit amount to be paid by the borrowers would vary, depending upon the situation and the specific property they wish to invest in.
  4. The borrowers also have the option of re-mortgaging the loan if they want to. The term re-mortgaging refers to the change in the lender within the tenure of the loan so that the borrower can avail promotional rates or better loan options.
  5. In the case of mortgage loans, the rate of interest is lower and the loan tenure is more flexible as opposed to personal loans.

Types of Mortgage Loan

In the UAE, one can get a mortgage on a variable rate or a fixed rate basis. The fixed terms are around usually around 5 years and can be as low as one year. When the fixed term ends, the deal is moved on to the variable rate of the bank.

A fixed-rate mortgage lets the borrowers have a surety about the repayment size for a particular amount of time. However, taking a variable deal in consideration would be a good idea in case the rate of interest seems to decline. The tenure of the loan is usually 25 years and the repayment will have to be done before turning 70 years old.

Documents Required for Mortgage UAE

While applying for a mortgage, the required documents may differ depending upon the bank. The lenders may ask you to present the following documents.

  • Emirates ID (for UAE Nationals).
  • Passport (copy), residence proof in the UAE, and current address proof (for expats).
  • Financial documents including bank statements, salary proof, trade license (for self- employed), etc.

Mortgage Loan: Step-by-Step Process

The following are the major steps to obtain a mortgage.

  • Deciding whether to get a broker or directly approach the bank or apply online.
  • Researching well to find the suitable kind of mortgage.
  • Obtaining an agreement in principle through the lender and asking for an evidence letter.
  • Looking for an ideal property that is well within the budget of the applicant and then making an offer.
  • After the price has been decided, making payment of the deposit for confirming the purchase and determining the completion date.
  • On the date of completion, funds will be released to the seller by the lender.

Mortgage Calculator UAE

Whether purchasing a new property or refinancing the existing home loan, looking for a suitable mortgage in the UAE can get confusing at some point in time. The wide range of options available from both international as well as local lenders adds more validation to the previous statement.

The cost of purchasing a property in the UAE can add up quickly, hence, it is important for the applicants to do detailed research for making sure that they can afford the charges and monthly payments.

Using a mortgage calculator will help them in finding out exactly what the monthly payments would be along with the fees they will have to bear while purchasing a property in the UAE.

In order to make all the calculations, the applicants have to enter the home price, down payment amount, rate of interest, and loan tenure in the calculator. The result shown will be the amount that the applicant will have to pay every month.

Repayment of Mortgage in the UAE

Repayment mortgages are amongst the major kinds of home loans in the UAE. They involve the payment of a set amount every month for the duration of the loan tenure. Generally, the payment will be done by setting the direct debit facility from the bank account of the borrowers on a particular date every month.

The interest-only mortgage is not very common. They involve the payment of only a part of interest every month, and then the payment of the entire principal amount when the term ends. Since the loans are risky, they are usually available only with 5-year tenures.

Banks and Features Mortgage loans

  • AED 10,000

    Minimum Salary

    AED 0

    Monthly Payment

    -

    Flat Rate

    20%

    Down Payment

    • Payment Holiday: You can benefit from a one month payment Holiday each year free of deferment charges, starting in the second year of your mortgage loan.
  • AED 10,000

    Minimum Salary

    AED 0

    Monthly Payment

    -

    Flat Rate

    0%

    Down Payment

    • Payment Holiday: You can benefit from a one month payment holiday each year free of deferment charges, starting in the second year of your mortgage loan.
  • AED 8,000

    Minimum Salary

    AED 9,289

    Monthly Payment

    4.25%

    Flat Rate

    0%

    Down Payment

    • Own your home faster.
    • Loan tenure can be reduced up to 8 years* on a loan term of 25 years.
    • More savings on interest cost.
    • Enjoy up to 90%* savings on interest cost on a 25- year loan term.
    • Flexibility and control.
    • A unique loan account linked to a highly flexible interest-bearing bank account.
  • AED 8,000

    Minimum Salary

    AED 9,082

    Monthly Payment

    3.99%

    Flat Rate

    20%

    Down Payment

    • Experienced and dedicated Mortgage Relationship Managers to guide you through the entire application process.
    • Dedicated after-sales Mortgage Service and Helpline Desk.
    • Option of Islamic & Conventional Home Finance.
    • Fixed Rate Options.
    • Repayment period of up to 25 years.
    • Financing up to 80% of the property value.
    • Competitive interest rate options.
    • Flexibility to partially settle your mortgage loan anytime.
    • Refinancing Options.
  • AED 8,000

    Minimum Salary

    AED 0

    Monthly Payment

    -

    Flat Rate

    20%

    Down Payment

    • Open to UAE nationals, expatriates and salaried non-residents.
    • No salary transfer required.
    • Experienced and dedicated relationship managers to guide you.
    • Dedicated after-sales mortgage service and helpline.
    • Flexibility to partially settle your home finance anytime.
    • Finance of up to 80% for UAE nationals and 75% for expatriates (of respective property values).
    • Option of three months EIBOR, six months EIBOR and fixed rates.
    • Payment terms of up to 25 years.
    • Welcome kit for every customer with a world of benefits.
  • AED 20,000

    Minimum Salary

    AED 8,584

    Monthly Payment

    3.35%

    Flat Rate

    20%

    Down Payment

    • No salary transfer required.
    • minimum salary: 20,000 AED.
    • Loan Term: Up to 15 years.
    • Loan amount Up to 10 million AED.
  • AED 20,000

    Minimum Salary

    AED 8,372

    Monthly Payment

    3.07%

    Flat Rate

    25%

    Down Payment

    • No salary transfer required.
    • minimum salary: 20,000 AED.
    • Loan Term: 3-25 years.
    • Loan amount must not exceed 8 times annual allowable income for UAE nationals and 7 times annual allowable income for expats.
  • AED 10,000

    Minimum Salary

    AED 7,454

    Monthly Payment

    1.81%

    Flat Rate

    20%

    Down Payment

    • 2 Year Fixed Margins Starting From 0.90%.
    • No Salary Transfer Required.
    • Minimum Monthly Salary AED 10,000.
    • Loan Term: 3-25 Years.
    • Products for UAE Nationals, Residents & Non-Residents.
  • AED 20,000

    Minimum Salary

    AED 9,082

    Monthly Payment

    3.99%

    Flat Rate

    0%

    Down Payment

    • Free property insurance.
    • Automatic upgrade to Priority & Gold status.
    • No pre-approval fees.
    • Higher finance amounts of upto AED 20M.
    • Special deals on developer handover payments.
  • AED 15,000

    Minimum Salary

    AED 7,631

    Monthly Payment

    2.06%

    Flat Rate

    25%

    Down Payment

    • Free property insurance for the entire tenure.
    • Optional grace period up to six months.
    • Profit free personal financing.
    • Automatic priority status upgrade.
    • Life insurance financing.
    • For your first property, the down payment is 25% if the property value is under AED 5M and 35% if property value is above AED 5M. For your second property, the down payment is 40%.
    • For salary transfer customers there is no processing fee for new purchases, owner to owner transfers or refinance. For non salary transfer customers the processing fee is 0.50% of financing amount or AED 5,000 (whichever is higher).
    • You get free of charge fire Takaful cover. Life Takaful is mandatory.
    • The reducing rate of this finance is 3.75% and the equivalent flat rate is 2.06%. The calculation used is a division of the reducing rate by 1.814 and this is indicative only.
    • The variable interest rate is based on the Central bank's 3 month EIBOR plus a bank margin.
    • It is not a requirement to transfer your salary to apply.
  • AED 10,000

    Minimum Salary

    AED 7,631

    Monthly Payment

    -

    Flat Rate

    20%

    Down Payment

    • 3.75% variable rate (based on the Central bank's 3 month EIBOR plus a bank margin). Free of charge Fire takaful property cover. Life Takaful is mandatory.
    • The early settlement fee is applied as per UAE Central Bank policy, which is 1% of the outstanding amount (principal + profit) to date, or AED 10,000, whichever is lower. The bank has the discretion to waive any or all of the total outstanding profit.
    • Maximum loan amount - AED 20,000,000.
    • Finance repayment period of up to 25 years.
    • You are required to put 20% or as per central bank regulations.
  • AED 20,000

    Minimum Salary

    AED 7,746

    Monthly Payment

    2.22%

    Flat Rate

    20%

    Down Payment

    • Finance available in Abu Dhabi, Dubai, Sharjah and Ajman.
    • Maximum Finance Amount up to AED 10 million.
    • Maximum tenure up to 25 years.
    • Down payment of 20% for UAE Nationals and 25% for Expatriates.
    • Unique Feature: No developer restriction.