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Mortgage in Dubai

Two methods exist to purchase property in Dubai – through a mortgage or cash. Although cash payment is definitely more budget-friendly, a mortgage enables you better flexibility to manage your finances. 

In case you were planning to own property via mortgage in the Emirate, it’s a must to learn the functioning of home loans. Keep reading our detailed guide to know how to achieve a loan for yourself. 

Mortgage in Dubai

Who is Eligible For Mortgage in Dubai?

Whether you prefer a villa or are more inclined towards apartments, it’s possible to achieve a home loan for this purpose, as long as you fulfill the eligibility criteria. Only the individuals meeting the following conditions can apply for a mortgage in the city:

  • Enjoy a monthly salary of AED 15k for employees and AED 25k for self-employment.
  • Age between 21 to 65.
  • A UAE inhabitant or native.

Remember that the minimum salary for a mortgage ranges depending on the bank. Some UAE banks enable natives to receive a monthly salary of AED 8k to apply for a home loan. So, this is based on specific bank policies. 

Non-residents are also free to explore the mortgage choices in the city. But their options are quite limited because very few banks offer mortgages to non-residents. Lastly, remember that banks can pose extra demands for home loan eligibility – minimum time dedicated to the current job, etc. 

The Required Documents to Gain A Mortgage in Dubai

Anyone who prefers to own a property through mortgage first needs to apply for it. And as with any other investment, paperwork is involved in the mortgage application. The documents can somewhat vary depending on the bank, but usually, you will have to prepare the following documents for mortgage application in Dubai:

  • The newest credit card statement
  • A copy of your passport and visa
  • Bank statement and pay slip for the last 6 months
  • A copy of the Emirate ID
  • Evidence of residence (Copy of DEWA bill or tenancy contract )
  • Evidence of employment in the form of a salary certificate 

In case you are a non-resident needing a mortgage, only two documents are demanded:

  • The bank statement for the last 3 months
  • A passport copy

The Steps To Get A Mortgage in Dubai

Do you wish to purchase a property in Dubai with some financial aid? Below is the complete step-by-step guide to achieving a home loan to finance your home investment:

Step 1 – Choose a lender 

In the Emirate, home loans are sourced through banks and have to be registered with the Dubai Land Development (DLD) in order to be legally valid. You can either hire a broker to do the effort on your behalf and achieve the best mortgage in Dubai or directly approach your bank to know their availability of mortgage deals.

Mortgage brokers possess immense knowledge and insight regarding the available home loan and local markets that would work the best for you. This enables the potential homeowner to concentrate on the efforts to discover the appropriate home rather than being confused and getting lost in the mortgage procedure.

Mortgage in Dubai

Step 2 – Select the suitable home loan for yourself

Various categories of mortgages exist in the city, but most of them belong to variable-rate and fixed-rate home loans. There are a couple of factors to be considered before choosing the type of mortgage that is appropriate for your situation. These factors are, but are not limited to:

  • The cash deposit amount you can manage to pay
  • Your lifestyle
  • The required loan amount
  • Type of property you need 

The majority of the UAE banks have their online home loan calculator that enables you to enter your variables in order to get an idea of their available monthly installments under the applicable mortgage interest rate in the city. 

Step 3 – Get a pre-approval letter 

The third and maybe the most critical step in the procedure for mortgage application in Dubai is having a pre-approval letter. A mortgage pre-approval letter is an official document given by the bank as a proof of your eligibility for gaining home financing.

The document outlines the maximum borrow limit allowed to the potential homeowner and presents a bigger chance to gain a home loan. Oftentimes, a mortgage pre-approval letter from a UAE bank requires 3 to 5 business days. 

Step 4 – Search for your dream home

After you have gained the pre-approval letter and budget, it is finally time to select your ideal home. The pre-approval letter is usually valid for 60 to 90 days based on the lender. This guarantees sufficient time to hunt for the property you prefer to own. 

Sometimes, people stumble upon their ideal home first and then later apply for a home loan. This is practical as well, but you might not be able to secure the complete amount of mortgage you require to own the property. 

Step 5 – Finalize the property purchase

After deciding on the property you want, contact your bank to finalize the home loan agreement. Your bank might assign a property evaluator to estimate the value of your ideal home and help you make a great offer on it. 

After you and the seller finalize the cost, you can pay the deposit and set a completion date for the purchase transaction. On the last day of the property transfer, your bank will release the mortgage amount to the seller. At this point, you will become the owner of your desired property. 

Mortgage in Dubai

Frequently Asked Questions FAQs

1. Can I get a home loan in Dubai as a foreigner?

Yes, you can, but it primarily depends on your bank. 

2. Can ex-pats purchase property in Dubai?

Definitely. The ex-pat inhabitants can own a property in the Emirate, but only in the dedicated freehold residential areas in Dubai. The city’s law also enables non-resident foreign property ownership in Dubai under particular conditions. 

3. How does a home loan operate in Dubai?

While considering buying property on a mortgage versus cash, it is important to remember how a home loan operates in the city. As per the Dubai mortgage law, foreigners are allowed to achieve a mortgage of 80% of the property value. This means that foreigners have to pay an initial deposit of 20% in order to own a property worth below AED 5 million in the Emirate.

The loan cap for freehold property home loans in the city is somewhat different. Achieving a mortgage in Dubai allows you to regulate the cash flow liquidity as compared to full cash purchase. 

4. How much deposit is required to purchase a home in Dubai?

In case you’re interested in how to get a mortgage in Dubai or owning a home through a mortgage in Dubai, the minimum cash down payment is influenced by the investment value of the property and the resident status. But usually, it’s a minimum of 15% and a maximum of 30% for UAE natives for a property worth AED 5 million. 

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