Mortgage basics
What is a UAE mortgage?
A UAE mortgage is a loan secured against a property, where the bank registers a lien on the title deed until the loan is repaid. UAE Central Bank rules cap loan-to-value at up to 80% for expat residents on a first home under AED 5M, limit debt repayments to 50% of income, and set a maximum term of 25 years.
The basics
You borrow a percentage of a property's value from a bank, repay it monthly over an agreed term with interest or Islamic profit rate, and the bank holds a registered lien on the title deed as security until the loan is settled. Miss enough payments and the bank can, as a last resort, force a sale to recover the debt. New terms like LTV and DBR are explained in the mortgage glossary.
Key UAE-specific rules
| Rule | Typical limit |
|---|---|
| Loan-to-value (LTV) | Up to 80% expat first home under AED 5M, less above that or for investment property |
| Debt burden ratio | Up to 50% of gross monthly income |
| Maximum term | 25 years |
| Age at maturity | 65 salaried, 70 self-employed |
| Early settlement penalty | Capped at 1% of outstanding balance or AED 10,000, whichever is lower |
Fixed, variable, and Islamic options
- Fixed-rate: rate stays constant for an initial period, typically 1-5 years, then reverts to variable
- Variable-rate: moves with EIBOR plus the bank's margin, see EIBOR explained
- Islamic (Sharia-compliant): structured as Ijara or Murabaha rather than interest, see Islamic mortgages
For a deeper comparison of the fixed and variable trade-offs, read fixed vs variable mortgages in the UAE.
What a mortgage actually costs beyond the loan
On top of interest or profit, expect the 4% DLD transfer fee, ~0.25% mortgage registration, a bank arrangement fee of 0-1%, an AED 2,500-3,500 valuation fee, and mandatory life cover (generally 0.4-0.8% of the loan per year) plus property insurance (around 0.03-0.05% of value per year). See the full fee breakdown.
Common mistakes first-time borrowers make
- Budgeting only for the deposit and forgetting the 4%+ in transaction fees
- Assuming a fixed rate never changes, when most revert to variable after the initial period
- Not comparing multiple banks, missing potentially lower indicative rates elsewhere
- Overlooking the early settlement penalty cap when planning to pay off early or refinance
What to do next
Compare indicative rates from 18+ banks via a free pre-approval, or read the full mortgage process to see every step from application to title transfer.
Run the numbers on your own case
Free Lenddoo tools and guides related to this article.
Last reviewed 7 August 2026
