Refinance
What are the costs of refinancing a mortgage in the UAE?
Refinancing a UAE mortgage typically involves a new bank arrangement fee (0-1% of the loan), a valuation fee (roughly AED 2,500-3,500), mortgage release and re-registration charges (around 0.25% of the new loan plus fixed charges), and an early settlement penalty from your current bank, capped at 1% of the outstanding balance or AED 10,000, whichever is lower.
The main cost components
Refinancing isn't free, but the costs are generally well defined and often outweighed by the savings from a lower rate or cash back offer. Here's an itemised, indicative breakdown for an outstanding balance of AED 1,500,000, using a 0.5% arrangement fee as an example.
| Cost item | Typical range | Indicative amount |
|---|---|---|
| New bank arrangement fee | 0-1% of loan | AED 7,500 (at 0.5%) |
| Valuation fee | Fixed | AED 3,000 |
| Mortgage release + re-registration (~0.25% of new loan) | ~0.25% of new loan | AED 3,750 |
| Mortgage registration fee | Fixed | AED 290 |
| Trustee office fee | Fixed | AED 4,200 |
| Existing bank settlement penalty (capped) | 1% of balance or AED 10,000, whichever is lower | AED 10,000 |
| Total indicative cost | - | AED 28,740 |
On a AED 1,500,000 balance, 1% would be AED 15,000, so the AED 10,000 cap applies to the settlement penalty. If your arrangement fee is waived or your bank charges less than 0.5%, your total cost falls accordingly — some banks charge 0% arrangement fee to win refinance business.
Offsetting the cost
- Some refinance offers include cash back of up to AED 13,500, which can cover most or all switching costs
- A lower rate reduces your monthly payment, which repays the switching cost over time
- Some banks reduce or waive their own arrangement fee to win your business
- Bundling the valuation and processing through one comparison avoids paying multiple valuation fees to different banks
How to work out if it's worth it
Add up your total estimated costs and divide by your expected monthly saving to find your break-even point — see when should I refinance my UAE mortgage for the full worked calculation. You can also see the full breakdown of mortgage fees in the UAE and the mortgage glossary for definitions of each fee.
Common mistakes to avoid
- Comparing only the headline rate and ignoring one-off costs
- Forgetting to ask your current bank for the exact settlement figure, which can include accrued interest
- Not checking whether cash back is conditional on keeping the new mortgage for a minimum period
Run the numbers on your own case
Free Lenddoo tools and guides related to this article.
Last reviewed 16 June 2026