What is a mortgage buyout in the UAE?

How a buyout works

You apply to a new bank while your current mortgage is still active. If approved, the new bank settles your outstanding balance directly with your existing lender, and your mortgage — along with the property's title deed mortgage registration — moves to the new bank on updated terms. This is the same mechanism as a general mortgage refinance, but specifically means switching to a different lender rather than renegotiating with your current one.

The step-by-step timeline

1. 1Day 1-2: Submit your application and documents to the new bank; it issues you a conditional offer
2. 2Day 2-4: Your existing bank issues a liability letter confirming your outstanding balance and settlement figure
3. 3Day 3-6: The new bank arranges an independent valuation of the property
4. 4Day 6-8: The new bank issues a final offer letter and prepares settlement funds
5. 5Day 8-9: The new bank pays off your existing lender, which then issues a release of mortgage
6. 6Day 9-10: The property is re-registered with the new bank as the mortgagee at the land department, and your new mortgage becomes active

Well-prepared applications with a straightforward property and a cooperative existing bank can complete in as fast as 10 business days end to end. Delays usually come from the liability letter or release of mortgage stage, since these depend on your current bank's internal processing.

Why borrowers choose a buyout

• A lower indicative rate than your current bank offers
• Your fixed period has ended and you're now on a higher revert rate
• Cash back offers — some buyouts include up to AED 13,500 cash back
• Access to equity you've built up in the property

Costs to weigh against the benefit

Your existing bank may charge an early settlement penalty, capped at 1% of the outstanding balance or AED 10,000, whichever is lower. The new bank may also charge an arrangement fee, valuation fee, and mortgage release and re-registration charges. Compare these costs against your expected savings using a mortgage calculator — see the full cost breakdown for typical amounts.

Documents you'll typically need

• Passport, Emirates ID and visa page
• Salary certificate and last 3-6 months' bank statements
• Latest mortgage statement and liability letter request from your current bank
• Title deed copy

Learn more

Read our full guide to mortgage buyouts in the UAE for a step-by-step walkthrough, and compare current mortgage rates before you decide.