What Expats Need to Know About Mortgages in Dubai

Being a homeowner in UAE is exciting, but many expats still chose to rent. The concern could be either the buying cost, uncertainty of future planning, or the cost for property purchase. Hence, Doo Property has prepared a comprehensive guide for expats to understand how mortgages work in the UAE to make informed and financially sound decisions.  

Step 1: Understand Eligibility for Mortgage Applications

Age & Employment: Applicants typically need to be between 21–65 and have a steady income for at least 6 months.  

Income: Minimum monthly income should vary among banks but generally be at least AED 15,000.  

Residency: Both resident and non-resident expats may apply, though rates and conditions vary.  

Credit Score: Dubai banks consider your credit score and financial history, including any international credit ratings if you’re new to Dubai.  

Step 2: Calculate Affordability & Set Your Budget

Down Payment: Expect a 20-25% down payment for residents and around 35% for non-residents, based on property type and value.

Monthly Repayments: Keep mortgage payments within 35% of your monthly income.

Additional Costs: Budget for Dubai Land Department fees (around 4%), mortgage registration fees (0.25%), and agent fees (about 2%).

Routine Expenses: Ensure mortgage payments are sustainable long-term without impacting daily expenses.

Step 3: Research Lenders & Mortgage Options

Banks and Lenders: Some banks specialize in expat mortgages, such as Emirates NBD, Mashreq, and HSBC.  

Loan Terms: Typically 5-25 years, with fixed or variable interest rates ranging from 2.5%-4.5%.

Loan-to-Value (LTV): For residents, LTV can reach up to 80% for the first property. Non-residents usually get an LTV of around 50-60%.  

Step 4: Choose the Desired Types of Mortgages 

Fixed-Rate: The interest rate stays the same for an initial period (usually 1-5 years) before potentially switching to a variable rate.

Variable-Rate: The interest rate changes based on the Emirates Interbank Offered Rate (EIBOR), impacting monthly payments.

Offset: This type allows borrowers to link their mortgage to a savings account, helping reduce interest payments by offsetting the loan balance with savings.  

Step 5: Choose Your Property & Make an Offer

Working with an Agent: Engage a reputable real estate agency like Doo Property to have reliable projects and listings as options.  

Selecting the Property: Properties in freehold areas are open to foreign buyers such as Dubai Marina, Downtown Dubai, and Palm Jumeirah.  

Making the Offer: Once you have selected the property, submit a formal offer through your agent and negotiate terms.  

Step 6: Final Mortgage Approval & Property Valuation

Property Valuation: The lender will assess the property’s market value, which may involve a fee.

Final Approval: Loan will be issued once valuation and documentation checks are complete.

Step 7: Sign the Sales Agreement & Pay Fees

Sales and Purchase Agreement (SPA): This contract outlines the terms between you and the seller, including payment schedules and conditions.

Dubai Land Department (DLD) Fees: Pay around 4% of the property value, plus 0.25% mortgage registration.  

Agent Fees: Typically, the buyer covers agent fees, usually around 2% of the purchase price.  

Step 8: Transfer Ownership & Finalize the Mortgage

Ownership Transfer: Both buyer and seller meet at DLD for the transfer.  

Mortgage Registration: Once registered, funds are released, and you receive the title deed.  

Step 9: Post-Purchase Financial Planning

Insurance: Consider property insurance to protect your assets and life insurance to cover the mortgage in the event of unforeseen circumstances.

Maintenance Fees: Many properties in Dubai come with annual service fees for shared amenities, the fees are usually calculated per square foot.

Currency Exchange: International payments can be impacted by currency changes.  

Lawyer: Protects your interests in contracts and fees.

Market Trends: Dubai’s market fluctuates, so stay informed.

Not Sure Where to Begin? Let Doo Property Guide You! 

Property purchase in Dubai as an expat is a fantastic opportunity, especially with the city’s attractive lifestyle, tax-free policies, and high rental yields. Doo Property provides a one-stop solution for you to navigate Dubai’s mortgage landscape with confidence and make a rewarding investment and finance decision.