Mortgage Cap in Dubai
Mortgage Cap in Dubai
What is mortgage cap regulations in UAE means?
The central bank of UAE has confirmed the introduction of mortgage caps as a precautionary measure to avoid the formation of a second market bubble.
The law is to restrict the amount of mortgages property buyers can borrow from lenders which could lead to better price control. The new rules differ for expatriates and nationals.
Mortgage cap for Expatriate:
- First time buyers with property price less than five million can avail a loan of only 75% of property value.
- First time buyers with property price greater than five million can avail a loan of only 65% of property value.
- Already own a property and want to invest again can avail 60% mortgage irrespective of the property value.
- Maximum possible repayment schedule is for 25 years.
- Maximum age to repay the loan is set to 65 years.
Mortgage cap for Nationals:
- First time buyers with property price less than five million can avail a loan of only 80% of property value.
- First time buyers with property price greater than five million can avail a loan of only 70% of property value.
- Already own a property and want to invest again can avail 65% mortgage irrespective of the property value.
- Maximum possible repayment schedule is for 25 years.
- Maximum age to repay the loan is set to 70 years.
Instruction of Mortgage law to banks and financial institutions:
- Lending can be done to property buyers upto 50 percent of their monthly salaries.
- Expats – The amount should be equal to seven years of their annual salaries.
- Nationals – The amount should be equal to eight years of their annual salaries.
The expectation of central bank by introducing the law is to ensure greater control overmortgage lending for banks and financial institutions. This considered to be the measures taken by the government to control prices in the market and avoid a market crash similar to the one that occurred in 2009 when property values dropped more than 65 percent.
Banks offering mortgage loans:
- Abu Dhabi Islamic Bank – 5% Fixed Rate For 5 Years – No Fees. 24 – Hour Approval
- Mashreq Bank – Dubai Mortgages @ 3.99% – Mortgages Up To AED 15 Million
- National Bank of Dubai – Mortgage Loans Emirates NBD
- HSBC – Home Loans and Mortgages Services UAE
- National Bank of Ras Al Khaimah – RAKBANK Direct – Mortgage Home Loans
