Guide to Property Mortgage in Dubai

Published on April 24 | Blogs

Acquiring property represents a meaningful milestone, reflecting enduring dreams fulfilled and financial security achieved. For these reasons, it's prudent to consider purchasing in Dubai for its thriving real estate sector and international developers, which progress unabatedly. Another key advantage is securing a mortgage in Dubai, which is comparatively simpler than in other similar countries globally. That said, one must not underestimate the importance of meticulous consideration when navigating through the mortgage acquisition process. Whether you are a first-time buyer taking your initial steps towards homeownership or an experienced investor trying to expand your assets, navigating the mortgage process in Dubai can initially appear overwhelming. However, fear not!

In this guide, we will take you through the essential aspects you need to know in order to secure a property mortgage in Dubai and make informed decisions throughout the mortgage journey to buy a property in Dubai.

Together, we will navigate through the complex terrain of eligibility criteria, documentation requirements, lender selection, and repayment strategies. By knowing the timeline, gathering the necessary documentation, and understanding the fundamental elements of the mortgage process, you will be better equipped and gain the confidence needed to embark on this exciting venture of a successful mortgage application journey.

Who Can Buy a Property in Dubai?

Dubai is known for its booming real estate market, but entering into homeownership can be daunting without sufficient resources at hand to pay outright. If buying property is on your radar - either as a personal residence, vacation home, or investment, acquiring a home loan in Dubai from your bank remains one reliable path to explore further.

However, if you reside anywhere within UAE territory and want to get this form of funding towards homeownership sorted out fast enough, then starting by meeting up necessary prerequisites would come in handy regardless of whether one's status reads ex-pat resident or native Emirati citizen who fall under the similar umbrella of rules. Parameters such as being aged between 21 and 65 years old and possessing a monthly salary ranging from AED 10,000-15,000 (for employees) or AED 25,000 (if one is self-employed) are essential standards to tick off.

Specific eligibility criteria for mortgage applicants can differ between lenders in Dubai. It is essential to assess your eligibility before approaching a lender to increase your chances of securing a mortgage. Additionally, understanding the required documentation, such as identification proofs, bank statements, salary certificates, and property-related documents, will help streamline the application process.

What is the Maximum Loan Amount?

If you are an expat and this is your first time buying a property in Dubai, you can borrow up to 80% of the property value in a loan if the property costs less than AED 5 million. On the other hand, if you’re a UAE national, you may borrow up to 85% of the property value if the property costs less than AED 5 million. For properties above AED 5 million, this drops to 65% for expat mortgages in Dubai and 70% for UAE nationals.

How Much Are the Down Payments for Property Loans?

Subsequently, as a first-time property buyer that costs less than AED 5 million, the downpayment should be the remaining amount of the property value, which is 20% for UAE residents and 15% for UAE nationals. If the property value exceeds AED 5 million, then the down payment increases accordingly to 35% for residents and 30% for UAE nationals.

What Are the Documents Required for a Property Loan?

For property loans, documents and paperwork will be required, and approval of these documents usually takes around two-three weeks.

As a Dubai resident, you will need the following:

  • Valid Passport
  • Valid Residency and Emirates ID
  • Salary certificate for at least the last six months
  • DEWA bills or Ejari contract as proof of address
  • Bank Account Statement

For UAE nationals, the following will be needed:

  • Salary certificate for at least the last six months
  • Bank Account Statement
  • Emirates ID
  • DEWA bills or Ejari contract as proof of address

What is the Property Loan Process?

  • Approach your selected bank directly or through a mortgage broker. In Dubai, home loans come through banks and must be registered with the Dubai Land Department (DLD) to be legally valid.
  • After that, you should understand the Dubai property mortgage plans eligible for you and the right type of loan. This is the point where you will need to submit the previously mentioned documents. Home loans in Dubai vary according to different rates of interest. Now most banks have online loan calculators that you can use with your own personal data and get an estimate of the monthly installments you will need to pay under the loan plan you choose.
  • This is probably the most important step, which is the pre-approval letter. This letter represents your eligibility for obtaining a house loan, drafting your maximum borrowing limit for your case. A house loan in Dubai pre-approval letter normally takes from three to five working days to be issued from the bank and is mostly valid for 60 to 90 days.
  • Once all of these steps are done and you have made your decision on which plan to go through with, it's time to pay the down payment and get the repayment schedule.
  • On the final day of the property transfer, the bank or mortgage lender releases your loan amount to the seller. So you become the owner of the property.

Dubai welcomes people from all over the world to buy a home here. It has all the facilities for a better life. This is an ideal investment location for many reasons.

Frequently Asked Questions (FAQs)

How much does a mortgage cost in Dubai?

The cost of a mortgage in Dubai can vary depending on several factors, including the loan amount, interest rate, repayment period, and additional fees associated with the mortgage. It is advisable to consult with banks, financial institutions, or trusted real estate developers with known legacies to guide you and provide specific information tailored to your circumstances and the current market conditions.

How easy is it to get a mortgage in the UAE?

It is easy for ex-pats and UAE nationals to get a mortgage in Dubai. You just have to meet certain criteria and provide the needed documents. Some of these criteria are to be within the age range of 21 to 65, to be working in a stable job for six months, and to be able to pay 20% of the property value.

Are mortgages in Dubai interest-free?

No, mortgages in Dubai are not interest-free but have very low-interest rates ranging between 3% and 5%, depending on whether you choose to have a fixed or variable interest rate.

What happens if I don't pay a mortgage in Dubai?

Failure to pay mortgage installments can lead to fines, imprisonment, and property seizure according to the contract terms that can be renegotiated with the lender if there is a legitimate reason for not paying.