Real Estate Dubai Guide: Getting a Mortgage Loan in the UAE

Over the years, the United Arab Emirates has seen an increase in real estate transactions which has contributed positively to the economy. For this reason, investors are compelled to buy real estates in Dubai. The UAE is one of the easiest and safest countries to purchase properties due to some of the laws from the Dubai Land Department and Legislating bodies. They’ve ensured that the process of owning a home in Dubai is straightforward and unambiguous. Gone are the days’ expats only sought after properties for rent in Dubai. Many residents now choose to live in apartments for rent in Dubai and also take a bold step by buying apartments for sale in Dubai. Residents who dream of purchasing a property for sale in Dubai but are unable to pay in cash can now do so by applying for a mortgage loan. Mortgage providers are furnished with the requirements for both expats and non-residents intending to buy a home or investing in the UAE. This makes real estate search and home acquisition in Dubai less daunting.

Firstly, residents who want to own a home in the UAE for the first time, should understand what a mortgage is. According to, a mortgage is “a loan from a bank & other financial institution that helps a borrower purchase a home. The collateral for getting a mortgage is the home itself. This meaning that if the borrower doesn’t make monthly payments to the lender and defaults on the mortgage loan, the banks have the right to sell the home and recoup its money.” Usually, Conventional Mortgage Finance is operated in other parts of the world, and it consists of two primary elements, such as:

- Principal: This is the specific amount of money the homebuyer borrows from a lender.

- Interest: Here, the lender charges you to borrow that money.

In the UAE, the mortgage types fall under the Islamic and Conventional Mortgage Finance. According to Islamic Mortgage Finance, an Islamic home loan is different from the conventional because it is prohibited and forbidden for Islamic financial institutions to charge interest. There are several Islamic financing models;

- Murabaha: here, the bank can purchase properties for sale in Dubai on behalf of the customer and ‘re-sells’ it to them at a profit. After buying from the bank, the buyer then pays the bank back through monthly instalments.

- Ijarah: this is where a buy and lease-back arrangement applies. This model is essential if you are planning to buy a property off-plan as no payments are made until the property is completed. 

Mostly, the mortgage decision becomes apparent after searching for apartments for sale in Dubai through a variety of property finder or real estate property portal. There are several types of real estate mortgage in the UAE. Some of the banks providing mortgage to expats include:


- Mashreq.

- Emirates NBD.

So whatever your real estate search is for, it is essential to understand the type of mortgages available, and the steps involved. Generally, a majority of the real estate companies in Dubai have information to advise their clients on mortgage types. It is essential to note that the mortgage is only applied to apartments for sale and not hotel apartments in Dubai.

Mortgage loans types in the UAE

As stated earlier, there are two primary mortgage finances- the Conventional and Islamic. Therefore, these mortgage types below fall under both mortgage finances.

- Residential Mortgages: This kind of loan is used to differentiate between a home loan and a commercial mortgage loan. In this case, a resident of a country can apply for this residential mortgage loan to acquire Dubai properties. The rates are typically lower than that of commercial mortgages and usually have lower down-payment requirements. After conducting property searches, the next step will be to find the best mortgage and home loans in Dubai. According to, to get preapproved, you will need to send an extensive and concise reason why you plan to buy a property in Dubai. After that phase, they will work closely with the lenders in the UAE to provide you with exclusive products and terms not available via any other channel. The next step is for them to work with one of the finance options (as discussed above). They will be in charge of handling the hard work. Once that is complete, you will be in the final stage of moving into your luxury home. They will provide you with free support even after the last step. The deposit amount for a residential mortgage in the UAE is 25%. 


- Investment Mortgages: These are mortgages loans that individuals take on properties that they plan to rent rather than reside in. Investment property mortgages usually have higher interest rates than traditional mortgages, and they may have stricter eligibility requirements. The new laws of mortgage loans have been issued by the UAE Central Bank. According to the new regulations, non-natives are allowed to take a loan of 75% of the total value of a chosen property for sale in Dubai for the first investment of not more than AED 5 million. In contrast, residents of Dubai will be allowed to get loans up to 80%.


- Non-Resident Mortgages: The opportunities for non-citizens to obtain mortgage loans are limited by a person’s legal status and lender guidelines. It is possible for non-residents to acquire a loan in the UAE but with restriction. Non-UAE residents have the rights to buy a mortgage from the UAE lenders; these rights have a few limits. The UAE Mortgage law states the non-residents’ should have down payment cash of 25% of the real estate value in addition to the purchase price. There may be an increase in the price of 35%, which will be added to the property cost if it goes above AED 5 million. In case the buyer decides to get another property, you will need to ensure there’s a 40% of the value of the property as a down payment cost.

- Commercial Mortgage: A commercial mortgage refers to a mortgage loan that is secured by commercial property. The proceeds received from a commercial mortgage are usually used in acquiring, refinancing, or redeveloping the commercial property. is responsible for sourcing, negotiating and executing all aspects of the financial transaction. This is done to ensure the highest levels of service and your best interests are protected at all times. The commercial mortgage loan is available to both residents and non-residents of the UAE. Loan serviceability can be based on existing or forecast rental income and Conventional &Islamic finance options are available as well.


- Rent-Only Mortgages: Also known as a buy-to-let mortgage. Rent-only mortgage is for residents who want to buy a property for rent in Dubai. This is done to rent the property out to tenants. Buy-to-let mortgages generally need a larger deposit than residential mortgages, and the interest rates are typically higher. Last year, the Central Bank introduced a mortgage capital to limit how much banks can lend. With these new guidelines, expats buying a property for under Dh5 million must now produce a minimum deposit of 25%, rising to 35% for properties above Dh5 million. For the second properties, the minimum deposit is 40%. The guideline applies to locals as well a 20% deposit is required for a first home under Dh5 million. This rises to 30% for properties over Dh5 million, and 30% for any second or third properties. What this means is that mortgage buyers also need a lump sum of cash ready for their down payment. 


- Fixed and Floating Rate Mortgages: With a fixed-rate home loan, the interest rate paid is fixed for a while, usually six months to five years. At the end of the term, you can choose to re-fix again for a new term or move to a floating rate. EIBOR, or the Emirates Interbank Offered Rate, is a daily rate published by the UAE Central Bank. This average interest rate is unique to all banks in the UAE within a particular period. This rate excludes the two highest and two lowest rates. The EIBOR periods are: overnight, 1 week, 1 month, 3 months, 6 months, 12 months. There are various advantages and disadvantages to this type of mortgage. Advantages include: 

  1. There is no increase in rate because the interest rate is locked in.
  2. Due to the fixed interest rate, you can effectively calculate your monthly mortgage.
  3. Leads to budgeting and personally allocation of funds.
  4. Fixed-rate mortgages are a good option for those with shorter-term mortgages.


These advantages are the primary reason many residents and locals opt for this option of a mortgage. However, the disadvantages include:

  1. There is no benefit if the bank’s base rate falls.
  2. The length of time the loan is fixed will cause the rate to be less competitive.
  3. The reversion rate is often high after your fixed period ends.

Investors choose whichever option out-ways the other.


- Offset Mortgages: The value of your savings is deducted from the amount you pay interest on, which lowers your monthly payments. With an offset mortgage, you will not earn interest on your savings. However, because people usually pay more interest on a mortgage than they make from a savings account, an offset mortgage could still save you money. This type of mortgage is a new concept in the UAE. Based on research, very few lenders provide an offset mortgage in the country. Under an offset mortgage, loan holders can link their savings account, current account, credit card account to the loan account. Whenever funds are credited to any account, the loan amount gets reduced by an offset of the credited amount. 


- Capital and Interest/Profit Mortgages: A Capital and Interest Mortgage is a type of mortgage in which monthly repayments are made up of capital repayments and interest. In summary, the Capital here refers to the amount you are borrowing. In contrast, the Interest relates to the amount of interest applied on top of that. They are among the most popular type of mortgage in the industry.


- Interest-Only Mortgages: An interest-only mortgage is a type of mortgage in which the borrower needs to pay only the interest on the loan for some time. The principal is repaid either in a lump sum at a specified date, or in subsequent payments.


- Land and Construction Mortgages: A construction loan is a short-term loan for real estate. You can use this mortgage loan to purchase land, build on property that you already own, or renovate existing structures if your program allows. Land and construction loans have similarities with the line of credit because you only get the amount you need (in the form of advances) to complete each portion of a project. Because of this, you pay interest on the amount you borrow. This is different from a lump sum loan, where you take 100% of the money available upfront and pay interest on the entire balance immediately).

These criteria should be met when getting a mortgage loan.

  • The age of the loan applicant shouldn’t be less than 21 years and, not more than 60.
  • The applicant should have a stable earning to repay the loan. The monthly income alone may not be sufficient in determining the loan amount.
  • A clean credit record.
  • The minimum monthly income required is AED 12,000. 
  • The Minimum length of service of the loan is 6 months.

For self-employed Locals and Expats:

  • They should Age between 21 and 70 years.
  • The minimum monthly income for the applicant is AED 20,000.  
  • The minimum length of business is 3 years.

Documents required for a mortgage loan in the UAE include:

  • Passport, Emirates ID or driver’s license.
  • Proof of residence.
  • Age proof.
  • Bank account statement.
  • Latest salary slips


In conclusion, buying a new home is a huge step, especially for first-time buyers. Therefore, choosing a loan option that will suit your needs can make the process easy. 

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