Emirates Islamic Bank mortgage: full guide

A guide to Emirates Islamic Bank mortgage offers, including their terms/conditions, typical financing offers, and application process with required documents.

Overview of terms and conditions

Emirates Islamic Bank was established in 2004 and is one of the leading Islamic financial institutions in the UAE. They specifically cater their banking services to and prioritize Emiratis (UAE nationals). All of their banking products are Sharia’h-compliant. This means that, instead of borrowers paying interest on a mortgage loan, the bank buys the property and then resells it back to the client with a deferred payment plan (that is inclusive of the bank’s profit margin). The bank effectively becomes the landlord and the borrower the tenant, until the monthly payments match the original purchase price upon which the property is transferred to the customer. 

Emirates Islamic Bank has various property financing products including: 

• Home Finance Bina’a

• Home Finance Manzili 

• Mohammed Bin Rashid Housing Establishment 

Home Finance Bina’a is only available to UAE nationals and can be used to finance restricted properties, that is, those in areas in which properties can only be held by UAE nationals, in all seven Emirates. Construction finance is available through Home Finance Bina’a for certain types of granted land. 

‍Home Finance Manzili is available to all borrowers (nationals, residents, and non-residents) to finance freehold properties. The property must be on Emirates Islamic’s approved projects list. 

‍The Mohammed Bin Rashid Housing Establishment (MBRHE) has financing programs for UAE citizens that meet specific requirements (income, etc.). Through this government program, eligible citizens can buy a new home or construct a residential property. Emirates Islamic Bank provides financing for borrowers that are eligible for an MBRHE loan product, with a tenure of up to 25 years and a financing amount of up to AED 1,000,000. Emirates Islamic also offers engineering and project monitoring services at no additional cost for properties that are under construction. 

The following are the general terms and conditions for their real estate financing options:

• Islamic loans only 

• Completed property in Dubai and Sharjah only (unless specified otherwise*)  

• Residential and commercial properties 

• Salary transfer not required 

• Finance amount: 

  • Minimum AED 200,000 

  • Maximum AED 5,000,000

• Down payment from: 

  • 15% for UAE nationals

  • 20% for resident expats 

• Pre-approval fee (offset against processing fee): 

  • For Bina’a salaried: AED 1,575

  • For Bina’a self-employed: AED 2,625

  • For Manzili salaried and self-employed: AED 1,050 

• Bank processing fee: 1% of finance amount 

  • No processing fee for buyout

  • For buyout with equity release, 1.05% of equity release amount

  • Fee can be deducted from equity release amount 

• Bank arrangement fee: AED 1,050

• Bank valuation fee

  • Residential: AED 3,675 for Bina’a; AED 2,625 for Manzili 

  • Commercial: AED 6,300 

• Service fee: AED 5,250 

• Partial settlement terms: 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)

• Late payment fee: AED 735 per installment 

• Bank transfer fee - 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)

• Life insurance terms 

  • Takaful fees: 0.12204 - 0.15072% per annum of outstanding finance amount 

  • External life insurance policy can be approved by the bank and assigned (this may have a fee) 

• Building insurance: 0.0525% per annum of the property value

* Land and construction financing is available for salaried UAE nationals with salary transfer. 

Emirates Islamic Bank may have more financing options and special offers for their Priority banking and Priority Gold banking customers. 
To qualify as a Priority client: 

• Minimum of AED 100,000 as monthly average balance across deposits/investments

• Salary transfer of AED 20,000-40,000 

• Home finance of AED 1 - 2.5 million 

To qualify as a Priority Gold client:

• Minimum of AED 250,000 as monthly average balance across deposits/investments

• Salary transfer of AED 40,000 or more 

• Home finance of more than AED 2.5 million

Now we can look at Emirates Islamic Bank’s residential and commercial financing offers. Take note that the actual rates listed were updated by Emirates Islamic on December 9, 2022, and that the rates, fees, and costs can change without notice. The 3-month EIBOR rate is from the UAE Central Bank website and is current as of January 26th, 2023. EIBOR rates are updated daily and subject to changes in the market.

Mortgages for employed borrowers

While salary transfer isn’t a requirement for receiving financing from Emirates Islamic, you will be eligible for fixed-rate and variable-rate offers with lower rates. 

‍Fixed-rate offers:

• 4.49% fixed for 1 year

• 4.99% fixed for 2 years

• 5.49% fixed for 3 years

• Reversion rates with salary transfer

  • Up to 75% loan-to-value (LTV): a fixed margin of 1.99% for the remaining term + 4.764% (3-month EIBOR) = 6.754%

  • Above 75% LTV: a fixed margin of 2.24% for the remaining term + 4.764% (3-month EIBOR) = 7.004%

• Reversion rates without salary transfer

  • Up to 75% LTV: a fixed margin of 2.39% for the remaining term + 4.764% (3-month EIBOR) = 7.154%

  • Above 75% LTV: a fixed margin of 2.64% for the remaining term + 4.764% (3-month EIBOR) = 7.404 % 

Variable-rate offers:

• With salary transfer 

  • Up to 75% LTV: 1.74% margin for the life of the loan + 4.764% (3-month EIBOR) = 6.504%

  • Above 75% LTV: 1.99% margin for the life of the loan + 4.764% (3-month EIBOR) = 6.754%

• Without salary transfer

  • Up to 75% LTV: 2.24% margin for the life of the loan + 4.764% (3-month EIBOR) =  7.004%

  • Above 75% LTV: 2.49% margin for the life of the loan + 4.764% (3-month EIBOR) = 7.254%

Other conditions/terms/fees for employed borrowers:

• Minimum floor rate 

  • Fixed-rate: the initial fixed-rate 

  • Variable-rate: 4.764% (3-month EIBOR) - 0.1% = 4.664%  

Mortgages for self-employed borrowers

Self-employed borrowers can access the same fixed-rate and variable-rate offers that are available to salaried employees without salary transfer, as shown below. They are not eligible for lower-interest loan offers with salary transfer since they are self-employed. 

‍Fixed-rate offers: 

• 4.49% fixed for 1 year

• 4.99% fixed for 2 years

• 5.49% fixed for 3 years

• Reversion rate

  • Up to 75% LTV: a fixed margin of 2.39% for the remaining term + 4.764% (3-month EIBOR) = 7.154%

  • Up toAbove 75% LTV: a fixed margin of 2.64% for the remaining term + 4.764% (3-month EIBOR) = 7.404 %   60% LTV ratio

Variable-rate offers:

• Up to 75% LTV: 2.24% margin for the life of the loan + 4.764% (3-month EIBOR) = 7.004%

• Above 75% LTV: 2.49% margin for the life of the loan + 4.764% (3-month EIBOR) = 7.254%

Discover what else you can expect as a self-employed borrower in the UAE including conditions, documentation, bank assessment, and process length.

Mortgages for non-resident borrowers

Due to their large focus on Emiratis, Emirates Islamic Bank doesn’t have much information on specific financing options for non-residents in the UAE. Non-residents may be eligible to apply for their Home Finance Manzili product, but will likely be offered higher rates and be required to make a significantly higher down payment. They will also need to submit more documentation as we’ll discuss when we cover the application process below. 

There are other banks in the UAE that have more options for non-residents. Kredium can help you find the
‍best mortgage offer for non-residents by searching among all the top banks in the UAE. ‍

Commercial mortgages

Emirates Islamic Bank has financing options for corporate, industrial, retail, or residential properties. 

‍General terms/conditions for commercial financing: 

• Can finance: office space, retail space, residential complex, etc. 

• Can finance completed properties in Dubai or Abu Dhabi or release equity from a property you own

• Amount up to AED 10,000,000

• Up to 60% of the purchase price 

• Up to 15 years tenure

Application process

You can get a glimpse of Emirates Islamic Bank’s mortgage application below. A mortgage broker can guide you through the application and help increase your chances of getting approved.
‍

Emirates Islamic also requires personal, financial, and property documents in addition to a completed property financing application. Applicants must submit a series of different documents depending on the financing product. 

‍Documents for Home Finance Bina’a 
‍For Salaried UAE Nationals:

• Copy of valid passport (original required for verification)

• Copy of "Khulasat Al Qaid" or National ID (original required for verification)

• Original Salary Certificate less than 45 days old providing details on the length of employment, current designation, and salary package OR

• Salary Transfer Letter in case salary is transferred to Emirates Islamic containing details on the length of service, current designation, and salary package.*

• Last 6 months' bank statements reflecting salary credits

• Liability letter less than 30 days old reflecting borrowings with the bank to which your salary is transferred

• Originals of property details including:

  • Quote/Offer Letter from the seller

  • Sale and Purchase agreement

  • Title Deed/Mulkia and Site Plan

  • In case of Sheikh Zayed Housing Program (SZHP), Mohammed Bin Rashid Housing Establishment (MBRHE), and Sharjah Housing Program (SHP), copy of valid facility approval

* For government/semi-government organizations, salary credited to the customer's Emirates Islamic Bank Account will be considered as evidence of assignment. 

For construction finance only:

• Evidence of down payment (if applicable)

• Approved drawings

• Bill of quantity, signed by all parties on each page

• Property specifications

• Schedule of work

• Cash Flow statement

• Building permit

• Demarcation certificate

• Owner share completion (if applicable)

• Trade License copies of contractor/consultant

• Performance bond/bank guarantee

• Retention bond undertaking

• Contractor opening an account with Emirates Islamic

Documents for Home Finance Manzili 
‍All applicants for Manzili products must submit the original property detail documents: 

• Quote/offer letter from the seller

• Sale and purchase agreement

• Title deed and site plan

• Receipts of the down payment made to the seller

They must also submit the additional documents from the table below, depending on their employment and residency.

Documents for Mohammed Bin Rashid Housing Establishment

• Copy of valid passport (original required for verification)

• Copy of "Khulasat Al Qaid" and National ID (original required for verification)

• Original Salary Certificate less than 45 days old providing details on the length of employment, current designation, and salary package OR

• Salary Transfer Letter in case Salary is transferred to Emirates Islamic containing details on the length of service, current designation, and salary package. Salary credited to the customer's Emirates Islamic Bank Account will be considered as evidence of assignment.

• Originals of property details including the

  • Sale and Purchase agreement

  • Title Deed/Mulkia and Site Plan

  • MBRHE copy of valid facility approval

  • Site Plan Copy

• Evidence of down payment (if applicable)

• Approved drawings with Schedule of work and Cash flow statement

• Bill of quantity, signed by all parties on each page

• Building permit with Demarcation certificate

• Owner share completion (if applicable)

• Trade License copies of contractor/consultant

To sum up

Navigating the mortgage market can be challenging and confusing, especially when it comes to the terminology associated with Islamic financing products. Hopefully, this guide to Emirates Islamic Bank’s mortgages has helped to clarify some of their terms, conditions, and offers. They clearly have a large number of financing options available, especially for UAE nationals. Here at Kredium, we can help you access financing products from Emirates Islamic and many other banks in the UAE while keeping your best interest in mind. As an international mortgage broker, we focus on providing our clients with personalized guidance and support whether you’re a national, resident, or
‍non-resident. 

We also have thousands of Dubai properties for sale that you can peruse and filter through to find your dream property. When choosing a property, a mortgage calculator is useful as it allows you to estimate your monthly payments, rental yield, and more. Learn about all the ways we can help you by registering on our website or contacting us today.