Compare Best Mortgage Rates in UAE & Dubai

Sun, 13 Dec, 2020

When it comes to real estate and property investment in the Middle East, the United Arab Emirates remains the top spot in the world, with cities like Dubai taking the helm. Dubai is the fastest developing city of UAE with numerous cutting-edge infrastructure, luxurious and high-end residential and commercial projects, and some of the most sought-after real estate properties in the world. Because of these many advantages, investors from all over the world are looking to own property in Dubai. However, not everyone has enough cash in hand to buy a property outright in Dubai. For such investors, Dubai offers some of the best mortgage rates in the UAE.

Some of the top real estate developers in UAE like DAMAC are offering highly convenient solutions for people who are looking to buy houses, villas, apartments, and commercial properties in Dubai with convenience. Visit us at https://www.damacproperties.com/  to check out the properties that are up for sale.

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But first, let us take a look at some of the key terminologies used in mortgage financing in UAE:

Glossary

There is often difficulty in understanding specific financial terms related to mortgage financing. Knowing them is important for understanding the mortgage in process in Dubai and all the aspects you need to know about it. Here are some important terms explained in the easiest to understand way. 

The Price

This is the total price at which the property is bought. 

Down Payment

The amount that you need to pay at the beginning, which is usually a small percentage of the total price.

Mortgage Amount

This is the total finance that you will get from DAMAC, which is the total price minus the down payment.

Interest Rate

The interest to be paid to finance the mortgage amount is calculated through this rate. 

Loan Term

This refers to the tenure in which the full price is to be paid. At DAMAC, we are offer 5 and 10-year mortgage plans.

Installment/EMI

This is the amount you have to pay every month.That you can get an estimation of this value by using the mortgage calculator. The EMI includes a fraction of the total loan amount and interest to be paid.

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What is Mortgage and Why You Should Use It? 

Mortgage financing is a convenient and easy path to owning a desirable property. Dubai offers the best home loans rates in UAE that allow you to purchase properties without paying the full price all at once. You can get a loan from a bank or a real estate developer to buy a property of your choosing, and then pay it off over time with a convenient and pre-planned payment schedule.

Using a home mortgage loan helps you avoid paying a huge sum of money at the time of purchase. This is a great option for people who have a fixed monthly income, which allows them to pay off the loan over a period of a specific number of years, as mentioned in the agreement. It is also a good option for people who have invested most of their money in business or other lucrative investment opportunities as it allows them to still purchase a home, without worrying about how they will pay off the full price of the property at once.

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The bottom line is if you find it convenient to pay for a property over the time of a few years, you should go for mortgage finance. 

Mortgage Financing in the UAE

As it is known to all, the UAE, particularly Dubai, has become a global hub in terms of trade, tourism, and several other industries. It also has one of the most helpful financial and legal systems, allowing residents and expats to manage their financials in the most secure, transparent, and convenient way.

You will find the most flexible and lowest mortgage rates in UAE, which makes all the desirable properties in the country within your reach. 

All the leading financial institutions offer mortgage facilities in the UAE. Along with them, leading real estate firms, like DAMAC, also bring you some useful financing options in collaboration with leading banks and financial institutions. You can make a comparison based on important aspects like Loan to Value Ratio (LTV), Early Repayment Charge, Loan Terms, and most importantly, the interest rates.

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Key of Taking Out Mortgage Loans in UAE and Dubai

Let us look at the key features of the mortgage loans in UAE that provide so many benefits to investors interested in buying property in Dubai uae.

  • Most banks in UAE offers two different kinds of mortgage. Investors can benefit from both variable and fixed mortgage rates in Dubai UAE.
  • When getting financing for buying a home, investors who purchase their house through mortgage opt for a long-term commitment. This ensures smaller monthly premiums and more time to pay off the loan.
  • Depending upon the mortgage agreement and the specific property that they want to invest in, the deposit amount to be paid by the investors will vary.
  • Investors can also select to re-mortgage the loan if they want. Term re-mortgaging refers to the change in the loan agreement so that the investor can take advantage of better loan options or promotional rates.
  • With mortgage loans, investors can enjoy a lower rate of interest and more flexible loan tenure as opposed to personal loans.

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Best Mortgage Rates in UAE for Expats and Nationals

UAE gives the utmost importance to expats who make up a large portion of its population. It is also one of the best countries to reside in terms of financial solutions available to those coming from other countries. Whether you are a UAE national or an expat, you can avail yourself of the lucrative financing options to buy the most luxurious and high-end properties in the country.

UAE nationals can easily get mortgage finance with up to 90% loan to value ratio, which means that properties can be bought by paying just 10% of the total price. Non-residents, or expats, can get mortgage loans with up to 75% LTV, so they can also finance properties by paying only a fraction of the total price upfront.

Non-residents are allowed to purchase leasehold and freehold properties in selected areas in different Emirates. There are over 75 freehold areas in Dubai which include top vicinities like Dubai Marina, Palm Jumeirah, Jumeirah Village Circle, Jumeirah Village Triangle, Al Barsha, Downtown Dubai, and Business Bay.

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In Abu Dhabi, one can purchase freehold properties in Reem Island, Saadiyat Island, Yas Island, Raha Beach, and Al Reef Village along with other areas. Similarly, there are freehold areas in all other emirates of the UAE.

If you are interested in buying properties in these sought-after areas, DAMAC can help you. Check out our list of high-end properties at https://www.damacproperties.com/en/communities/.

The Various Mortgage Loans Offered in the UAE

The Various Mortgage Loans Offered in the UAE

The UAE offers several different types of mortgage loans. These loans come with different mortgage interest rates in Dubai uae. However, they all require a small percentage of the total price to be deposited as down payments. The rest of the portion is paid over a period of time through easy mortgage installments (EMI). Let us take a look at the various types of mortgage loans investors can benefit from in the UAE.

Fixed Rate Mortgage in UAE

This is one of the most commonly offered mortgage types. As is evident by the name, this mortgage loan has a constant fixed interest rate throughout the loan tenure, which can be anywhere between 1 and 5 years. The benefit of a fixed rate mortgage in UAE is that the EMI's for the complete term is constant, so you can always plan your financials accordingly without any hassle. If the rate you are paying is substantially above the market rate, you can apply for refinancing to get a better deal.

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Variable Rate Mortgage

It is also one of the traditionally used and well-known mortgage types with variable interest rates. The loan tenure is usually 25 years or before you turn 70, whichever comes first. The interest rate keep changing according to the Emirates Interbank Offered Rate (EIBOR). The benefit of this mortgage type is that you can end up paying a lesser amount, depending on the EIBOR rate. 

Discounted Rate Mortgage

Discounted rate mortgages are the ones in which the banks or real estate developers offer a fixed and below-the-market rate for a certain period within the loan term. This can be very useful as the EMI's are much lower and easily affordable in the initial phase. If the complete tenure of the loan is within the discounted period, that you can save money monthly by taking advantage of this type of mortgage.

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Capped Mortgage

A capped mortgage is a form of variable mortgage, but with an added advantage. With a variable mortgage, it can be a cause of concern since you do not know how high the interest rate can go. To eliminate this worry, financial institutions and service providers put a limit to the rate, so you can know the maximum amount you might have to pay as interest. 

Offset Mortgage

It is the most modern form of mortgage offered by banks and financial institutions. In this type, the principal amount is highly variable, as it allows investors to deposit funds and then take them out at will. The interest will only be charged on the outstanding principal amount, allowing the debtors a lot of freedom in running finance loans. 

Compare Mortgage Rates In Dubai

Compare Mortgage Rates In Dubai

In the UAE, you have the luxury of finding different mortgage solutions offered by different banks and real estate companies. You can conduct a UAE home loans rates overview, check out different aspects of all these offerings, and find the right deal that suits your interests perfectly. Let’s take a look at the UAE mortgage rate comparison table:

Bank Name

Min Salary

Reducing Rate

ADIB Bank

AED 15,000

3.75%

Standard Chartered

AED 10,000

3.75%

RAKBANK

AED 15,000

3.99%

Commercial Bank of Dubai CBD

AED 20,000

3.54%

ADCB Bank

AED 40,000

4.49%

Emirates NBD

AED 20,000

5.75%

First AbuDhabi Bank FAB 

 

AED 15,000

7.49%

Make the Most Convenient Purchase with DAMAC’s Mortgage Assist

Make the Most Convenient Purchase with DAMAC’s Mortgage Assist

DAMAC is one of the most prominent names in the UAE's real estate industry. It has garnered worldwide fame with its urbane and upscale residential and hospitality projects. Every project delivered by DAMAC is distinguished by its immense focus on the convenience and luxury of its residents. These are some of the reasons why DAMAC’s projects are always sought-after by all those looking for a plush lifestyle. 

DAMAC’s properties are worth paying a fortune, and they become even more attractive and appealing when available through exceptional mortgage plans brought to you by DAMAC. The real estate giant has now also partnered with Abu Dhabi Islamic Bank (ADIB) to bring the best home loans rates in Dubai uae for all property buyers. 

Salient Features of DAMAC and ADIB Mortgage Offer

Salient Features of DAMAC and ADIB Mortgage Offer

DAMAC’s properties are now available through some of the very best mortgage plans in the country. You will find a lot of highly attractive features in the deal jointly presented by ADIB and DAMAC. Here are the highlights of the service: 

Lowest Interest Rates

ADIB and DAMAC offer some of the best mortgage rates in Dubai, Abu Dhabi, and other cities of the UAE. The interest rate can be as low as just 1.99% for 7 years. This applies to all the properties brought to you by DAMAC. 

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No Additional Costs

The service is free from any processing and evaluation fee, ensuring the lowest cost for acquiring a loan to get your dream property. 

Exceptional LTV Ratio

UAE nationals can take advantage of the financing for up to 85% of the property value. For expats can get loans of up to 80% of the property price.

Extended Tenure

The maximum tenure of the loan offered is 25 years. This provides a lot of ease and convenience for investors to pay off their home loans.

With these features, getting a flat or villa in your favorite project is now easier than ever. You can become the owner of a lavish piece of real estate in a matter of days without having to pay the full price up-front. Take a look at UAE’s prime properties and find out what kind of home loans Interest Rates you can find on them.

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Why Choose DAMAC Mortgage Assist?

DAMAC brings you the opportunity to finance your properties with the lowest mortgage rates in Dubai UAE. Along with that, DAMAC Mortgage Assist makes the whole process extremely convenient and hassle-free for buyers. Here is what you get by using this feature:

  • Quick and efficient mortgage processing, with the approvals in just 72 hours. 
  • 24/7 support by experienced financial advisors. 
  • Flexible policies for equity release
  • Preferential terms for all buyers. 
  • Direct purchase with the least possible paperwork.
  • Special payment plans ensuring the highest convenience. 
  • No hidden charges or commissions. 

Mortgage Calculator for Calculating Mortgage for UAE Properties

Whether you are buying a new property or looking for refinancing, calculating the mortgage rate can become quite confusing. The cost of investing in a property in the UAE can add up quickly; hence, it is important that investors find out the exact amount of premiums and interest that they will have to pay or they risk going beyond their budget.

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The mortgage calculator is the easy way for you to find out the important details before applying for a mortgage. DAMAC brings you this exceptional feature with which you can get an estimation of every factor, including the down payment, EMI, and other associated fees in a few seconds. The calculator is easy to use and saves you the time and effort involved in contacting a mortgage advisor to guide you about these aspects. 

How to use the Mortgage Calculator to Find Out Mortgage Rates in Dubai 2021

To use the mortgage calculator, you have to enter basic details about the property and your preferences to get the complete picture. Here is what you need to do: 

  1. Enter the price of the property you are interested in financing. 
  2. Select a percentage for the down payment from available options. 
  3. Select a loan period (life of the loan).
  4. The rate of interest you can afford .
  5. Click “Calculate” to get the results .

Step by Step Process of Applying for UAE Mortgage Loan in 2021

Here is how you can obtain a loan to get the best mortgage rates in UAE.

  • Figure out whether you want to hire the services of a mortgage broker, directly approach a bank or apply online.
  • Do some research to find out about the UAE mortgage rate in 2021.
  • Acquire an agreement in principle through your lender and ask them to provide you a letter of evidence.
  • Look for a property that is within your budget.
  • Once the price has been set, pay the deposit to confirm the purchase and set a completion date.
  • On the date of completion, the lender will release the funds to the seller.

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Mortgage Repayment in the UAE

The investor who has purchased a property through a mortgage will be required to make monthly payments of an agreed-upon amount for the tenure of the loan. Typically, the payment will be concluded each month by setting a direct debit facility from the investor's bank account on a fixed monthly date.

There is another form of mortgage repayment for an interest-only mortgage; however, they are not very common. They refer to the payment of only a portion of your interest every month and the payment of the full principal amount when the term ends. Since these types of loans are quite risky, they are not only often available for no more than a 5-year tenure.

TouchPoints in Mortgage in UAE

The ADCB bank offers a TouchPoint Relationship, which allows you to earn TouchPoints by using certain products and services of the bank. These include current account, savings account, fixed deposits, ADCB credit and debit cards, personal loan, auto loans, mortgage loans, electronic channels, and investment and insurance products.

For people who have taken out a mortgage, the bank will award 200 TouchPoints for every AED 1,000 loan amount up to a maximum of 500,000 TouchPoints. You can then redeem your TouchPoints at select merchant locations.

Why Should You Invest In DAMAC’s Project through Mortgage?

The most important aspect of this mortgage is the service is that you get to own a premium property by DAMAC, which in itself is a great benefit. Being a market leader, DAMAC ensures the provision of the highest standards of living, with well-crafted communities, lavish interiors, and enviable amenities for all residents.

All of DAMAC’s projects have a high market demand, as the name commands a lot of trust from all potential property owners. 

With DAMAC’s Mortgage Assist, you can enjoy the best overall financing service, with the best home loans Interest Rates, transparency, and flexibility. You cannot find such a great combination of quality and service elsewhere, bringing you the most desirable residential properties in the easiest and most affordable way. So don’t miss out on this rewarding opportunity and apply for a mortgage today. 

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Required Documents To Apply for Mortgage in UAE

Depending on the bank you are working with, the requirements for the documents may vary. However, most lenders will ask you to produce the following documents:

  • A valid Emirates ID for UAE nationals
  • A copy of your valid passport
  • Proof of residency in the UAE or proof of current address for expats
  • Financial documents including proof of salary, bank statements, trade license for self-employed people, etc.

Terms and Conditions for Mortgage in UAE

It is important that you learn about the terms and conditions before applying for a mortgage in the UAE. The terms in UAE are very flexible, so everyone with an adequate monthly income can apply. 

  • All mortgage contracts are regulated through the mortgage for laws of the UAE and must fall under the designated guidelines.
  • The mortgages have to be registered with the Real Estate Regulatory Agency (RERA). All the required documents and particulars have to be submitted at the time of registration. Failing to do so will invalidate your mortgage. 
  • The property to be mortgaged must be legal, and the buyer must also be legally eligible for buying the property in accordance with the regulatory laws in UAE. 
  • A non-refundable fee of AED 1000 will be charged for the application. The fee is considered as one of the closing costs in the UAE.

Frequently Asked Questions

How can you get the best mortgage rates in UAE? 

The home Home Loan Interest Rates in Dubai and other cities depend on the bank you are working with, as they all offer different rates. For buying a DAMAC property, you can apply for DAMAC Mortgage Assist to get the lowest home loans rates. 

What are AAA mortgage loans in UAE?

AAA is the highest rating for a mortgage loan service awarded by an independent credit rating agency. 

What credit score is required to get a home loan?

The credit scores can range from 300 to 900. Any credit score above 700 will earn you approval from the mortgage bank. If you maintain top credit scores, the best mortgage rates in UAE will be within your reach.

What are the home loan rates in Dubai? 

Home mortgage rates in Dubai range from 2.99% to 3.55%. You can compare the best mortgage rate in UAE and select the one that is within your budget. DAMAC brings you the best property mortgage Dubai has to offer.

What are the different types of mortgage loans? 

The types of mortgages available in UAE are fixed-rate mortgage, adjustable-rate mortgage, discounted rate mortgage, capped rate mortgage, and offset mortgage.

Are mortgage rates negotiable?

Home loan rates are generally non-negotiable. To find the lowest Home loan rates in Dubai uae, conduct a mortgage comparison in UAE to see the different rates offered by different banks.

Which bank has the best mortgage rates?

The best mortgage rates for buying a DAMAC property are offered by ADIB Bank through DAMAC Mortgage Assist. By using DAMAC Mortgage Assist, you can avoid the hassle that comes from conducting a UAE mortgage rate overview and find the best one straight away. 

What is a good mortgage rate?

A good mortgage rate is one that is less than other Home loan rates offered in the market. DAMAC offers the best mortgage rate in UAE for its buyers. 

Are mortgage rates expected to drop?

The Home Loan Interest Rates can drop depending on the ruling from EIBOR. 

Who can apply for mortgage financing? 

To apply for a mortgage, you need to have a fixed salary or a consistent source of income. This allows gauging the capability of paying back the loan. 

How much loan can be acquired through DAMAC Mortgage Assist? 

The finance offered is up to 85% of the property price for UAE nationals and up to 80% for expats. 

Where can expats buy a property through a mortgage?

Expats can use mortgage finance to buy properties in all of DAMAC’s projects located in freehold areas. 

How much time does it take for the loan to get approved?

The loans are approved within 72 hours, so it is just a matter of a few days for the process to complete.

What is the maximum loan term?

The maximum loan term offered through DAMAC Mortgage Assist is 25 years. 

Who can apply for a mortgage loan in the UAE?

You can apply for a mortgage loan in Dubai uae if you are UAE national or resident aged between 21 and 65. You also need to have a monthly income of AED 15,000 if you are a salaried individual and AED 25,000 if you are self-employed.

What is the difference between flat and reducing rates of interest in UAE?

Under flat lending rates, the interest is calculated on the principal amount. On the other hand, reducing rates of interest are based on the outstanding loan amount. Flat or fixed rates of interest result in higher interest rate equivalence.

Can you make overpayments on the mortgage in Dubai and other cities of UAE?

Most lenders will allow borrowers to pay 10% of their mortgage balance as overpayment each year if they are in their introductory, fixed, or discount period. If, however, you are paying the standard variable rate, you can overpay as much as you want.

What is Loan-to-Value Ratio or LTV in mortgage financing?

The term measures the relationship between the loan amount and the market value of your house. This number lets lenders figure out how much risk they are taking on with a mortgage loan.

What is Early Repayment Charge or ERC in mortgage financing in UAE?

An ERC is a penalty that your lender may charge if you exceed the allowed amount of overpayment or pay off your loan too early.

Is 2021 the right time to apply for a mortgage in UAE?

The UAE is currently offering record-low mortgage rates, which makes it prime time for investors interested in buying a property in the UAE to take out a mortgage. In addition, the variable mortgage rate seems to be the cheaper option than fixed mortgage rates for the first time in several years.

What do fixed rates and variable rates refer to in UAE Mortgages?

A fixed rate mortgage has a constant fixed interest rate throughout the loan tenure. On the other hand, variable rate refers to the mortgage rate in which the interest rate keep changing according to the Emirates Interbank Offered Rate (EIBOR).

What is EIBOR Rate?

The Emirates Interbank Offered Rate (EIBOR) is the standard interest rate stated in the dirham for lending among banks in the UAE market.

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