Obtaining a mortgage (often referred to as a home loan) is probably the most complicated part of buying a property in the UAE. However, the good news is that if you meet the prerequisites, the process should go smoothly. When financing your home, it’s tempting to go with the lowest possible interest rate. However, it’s worth noting that most advertised rates are fixed for a short period. Evaluating the variable rate, which includes both the base rate and margin after the fixed intro period, can help you make a balanced decision. Generally, interest rates range from 2.99% - 7%, and loans are for 25-30 years.

If you live outside of the UAE it is still possible to obtain a mortgage for a property in Dubai but the following procedure is relevant for those residing in the UAE.

Prerequisites

• UAE bank account or approved international bank account and required deposit.
• Salaried or self-employed with minimum monthly salary of Dhs.15,000.
• Aged 21 or over (and a maximum of 65 years for salaried individuals and 70 years for those self-employed).
• A minimum length of service of one year in current, UAE employment.
• A minimum of three years of total employment.

What to bring

• Passport with residence visa (original and copy)
• Bank account details
• Six months’ bank statements
• Proof of deposit
• Salary certificate

Self-employed applicants

• Memorandum and articles of association (MOA)
• Audited financial statements of last two years
• Board resolution (copy)
• Trade licence (copy)
• Dubai Chamber of Commerce & Industry (DCCI) membership
• Business profile on company letterhead

Procedure

Pre-approval

• Get a mortgage pre-approval before beginning your property search – that way you can find out how much the banks are willing to lend you. You will need to submit the above documents to your chosen bank, and you will get the pre-approval within four days. There is a fee of around Dhs.1,000.

Loan amount 

• This can be calculated on more than one salary, providing they are listed as co-borrowers in the contract.
• For properties valued at less than Dhs.5 million, expat first-time buyers can get a mortgage of 75%.
• For properties valued above Dhs.5 million, expats can only get a mortgage of 65%.
• Expats taking out a ‘home loan’ for a second, third, fourth or subsequent property will be able to get a 60% mortgage.
• Financing for off-plan property is restricted to 50% regardless of the value of the property or the nationality of the applicant.

Property purchase

• Once you find a property, the lender needs to provide an unconditional approval for the mortgage.
• Ensure you have life insurance and property insurance, which are mandatory and need to cover the tenure of the loan.
• The lender issues an offer letter followed by the mortgage documentation stating the terms and conditions.
• Sign this and return it to the lender with copies of the Sales & Purchase Agreement (SPA) and down payment receipt.
• There is a processing fee of 1% on the approved loan amount, or maximum Dhs.40,000.
• The mortgage payment is then transferred to either the seller or the existing lender. This takes around seven days.
• Equal instalments are then taken from your bank every month.