How To Get a Mortgage in Dubai (UAE) – Step-By-Step Guide
Ready to buy your dream home in Dubai? Navigating the mortgage process can feel overwhelming, with many options, requirements, and legal steps to consider. Having a solid plan and understanding each stage is essential to avoid costly mistakes and delays. This step-by-step guide breaks down everything from choosing the right lender to signing the final offer, helping you approach your property purchase with confidence and clarity.
Step 1: Compare Mortgage Options and Choose a Lender
Before diving into paperwork and approvals, your first step should be understanding the types of mortgages available in the UAE and deciding which lender or broker can offer the best fit for your needs. This will shape the rest of your mortgage journey, so take time to compare all available options. Kredium's mortgage advisors make this step easy by comparing mortgage products across multiple UAE banks, saving you time and ensuring you get the best possible rate for your needs.
Understanding Mortgage Types in the UAE
The right mortgage starts with knowing how different types of loans work. In the UAE, the two most common options are fixed vs variable mortgage rates. Each has its pros and cons depending on your financial goals, risk tolerance, and how long you plan to hold the property.
Fixed-rate mortgages
With a fixed-rate mortgage, your interest rate stays the same for a set period, usually between 1 to 5 years. This gives you predictable monthly payments, making it easier to plan your finances. However, fixed rates are often slightly higher than variable rates, and once the fixed period ends, the loan usually reverts to a variable rate.
However, fixed-rate loans often start with slightly higher interest rates than variable ones. And after the fixed period ends, your loan typically switches to a variable rate set by the bank, which could increase your monthly payments. If you plan to keep the property long term, it’s worth calculating how much more you’ll pay over time and whether mortgage refinancing will be needed later.
Best suited for:
Buyers who want stability and predictable payments
Those planning to stay in the property for at least 3–5 years
Risk-averse borrowers
Variable-rate mortgages
Variable or floating-rate mortgages are tied to the Emirates Interbank Offered Rate (EIBOR) and can change periodically. These loans might offer lower rates at the beginning, but your monthly payments can increase if market rates rise. They suit borrowers who can handle some risk or expect interest rates to fall.
While they often start with lower rates than fixed mortgages, they carry the risk of rising payments. That said, if interest rates drop or remain low, you could save significantly over the long term. Some buyers opt for variable rates if they don’t intend to hold the mortgage for more than a few years or if they anticipate selling or refinancing soon.
Best suited for:
Buyers comfortable with market-driven fluctuations
Investors or short-term owners
Those expecting interest rates to fall or remain stable
Step 2: Get a Mortgage Pre-Approval
Once you’ve compared your mortgage options and selected a lender, the next step is to apply for a mortgage pre-approval. This is a formal indication from a bank that you qualify for a home loan up to a certain amount, based on your financial profile. Pre-approval strengthens your position as a buyer and shows sellers and agents that you're serious and financially prepared.
Why Pre-Approval Matters
Getting pre-approved gives you a clear budget range and helps narrow your property search. It also speeds up the mortgage process later, as much of the financial vetting has already been completed. In competitive markets, having pre-approval can also give you an edge over other buyers who haven’t secured one.
Documents Required for Pre-Approval
To assess your eligibility and financial standing, banks and brokers require specific mortgage documents during the pre-approval stage. These help lenders determine how much you can borrow and under what terms. Be prepared to submit the following:
Passport and visa copy
Emirates ID
Proof of income (salary certificate or self-employment trade license)
Bank statements (usually 6 months)
Credit report (from AECB)
Additional paperwork may be requested depending on your employment status, residency, or lender-specific criteria.
Pre-Approval Timelines and Validity
Most mortgage pre-approvals are processed within 3 to 5 working days, depending on the lender and the completeness of your documentation. Once issued, pre-approvals are usually valid for 60 to 90 days, giving you a set window to search for a property and finalize your mortgage.
Step 3: Sign the Sale and Purchase Agreement (SPA)
Once your mortgage pre-approval is in hand and you've found the right property, the next critical step is signing the Sale and Purchase Agreement (SPA). This legally binding contract formalizes the deal between you and the seller, outlining the terms of the property transfer. It’s not just a formality, it’s the foundation of your legal protection as a buyer in the UAE.
What Is the SPA and Why It Matters
The SPA includes all key terms of the transaction: purchase price, payment schedule, handover date, penalties for delays, and conditions under which either party can terminate the agreement. Once signed, it legally commits both buyer and seller to proceed with the deal.
It’s essential to review every clause carefully. If you're unfamiliar with the legal terminology, consider hiring a property lawyer or having your agent explain it in detail. Don’t rush this step, once you sign, you’re financially and legally bound.
What to Look Out for Before Signing
Before committing to the SPA, it’s important to go beyond just the purchase price and timeline. The fine print can contain clauses that significantly affect your financial responsibilities and legal rights. Take the time to understand each key area of the agreement to avoid surprises later on.
Payment terms and deposit conditions
Before signing, review the payment structure carefully. Most agreements require a 10% deposit at the time of signing. Make sure you understand when this deposit becomes non-refundable and under what conditions you could lose it. The rest of the payment schedule should be clearly broken down, especially for off-plan mortgages where installments are tied to construction milestones.
Handover and grace periods
The SPA should state an expected handover date, and it needs to be realistic. Some contracts allow the developer a grace period for delays, often ranging from 6 to 12 months. Check whether this is included and what your rights are if the handover is significantly delayed. Knowing the exact timeline helps you plan financing, moving, or potential rental income.
Penalties, defaults, and exit clauses
Well-written SPAs define what happens if either party fails to meet their obligations. If you're late with a payment, the agreement may impose penalties or allow the seller to terminate the deal. On the other hand, if the seller fails to deliver the property as agreed, you should be protected through refund clauses or compensation options. Read these clauses carefully, they’re often the most overlooked but can have serious financial consequences.
What Comes Next
After signing the SPA, your lender will initiate a property valuation - note that valuation fees may apply - and move forward with the final mortgage approval. These next steps will ultimately lead to the ownership transfer and mortgage registration, covered in the following sections.
Step 4: Submit the Full Mortgage Application
After signing the SPA, it’s time to move from pre-approval to a formal mortgage application. This stage involves a deeper financial assessment and a property valuation, both of which are required before the bank can issue a final loan offer. Kredium’s mortgage advisors can guide you through every step, helping gather the necessary documents and maintaining clear communication with your lender to make the full application process smoother.
Documents You’ll Need to Provide
While many of your documents were already submitted for pre-approval, mortgage banks and lenders usually request updated versions during the full application process. These often include:
A copy of the signed SPA
Updated bank statements or payslips
Property documents from the developer or seller
A valuation request form (some banks require you to initiate this)
If you're employed, self-employed, or a business owner, you may also need to resubmit trade licenses, audited financials, or company bank statements.
Property Valuation Process
As part of the approval process, the bank will assign an approved valuation company to assess the property’s market value. This step is crucial because the bank will base your final loan amount on the lower of the purchase price or valuation.
If the valuation comes in lower than expected, you’ll need to cover the shortfall yourself, since the bank will not increase the loan amount to match your offer.
What Happens After Submission
Once your documents and valuation are submitted, the bank’s credit team will begin their final review. This process typically takes 5 to 7 working days, depending on the lender and how quickly documents are verified. If approved, the bank will issue a Final Offer Letter (FOL), your official mortgage contract.
Step 5: Review and Sign the Final Offer Letter
Even if the loan terms were initially discussed during pre-approval, the Final Offer Letter is the binding version of the agreement, and should be reviewed in full before signing. This is a critical step in the mortgage journey, as it locks in your financing and sets the stage for ownership transfer. Once you sign the FOL, your loan is legally confirmed, and you’re committed to its terms for the duration of the agreement.
While much of the content may seem familiar from earlier discussions, it’s essential to treat the FOL as a fresh review. Any discrepancies, unclear clauses, or overlooked fees could impact your repayment or cost you more in the long run. Make sure you read it thoroughly and ask your banker or mortgage advisor to clarify anything you’re unsure about.
What’s Included in the Offer Letter
The Final Offer Letter (FOL) lays out the full, legally binding terms of your mortgage. Here’s what you can expect to see: it’s the document that officially confirms what the bank is offering and what you’re agreeing to. Before signing, it’s important to understand how each part affects your long-term financial commitment.
Loan amount and tenure
The letter confirms the maximum loan amount you’re approved for, typically based on the lower of the property’s valuation or purchase price. Alongside that, you’ll see the loan tenure, the repayment period, often up to 25 years. These two factors together determine the scale of your monthly payments and overall loan cost.
Interest rate structure
You’ll find whether the loan is based on a fixed, variable, or hybrid rate. Fixed-rate terms offer predictable payments for a set period (often 1–5 years), while variable rates can fluctuate based on EIBOR. It’s important to know how and when your rate could change, especially after any fixed term ends.
Monthly repayments
The FOL will show your expected monthly installment based on the approved rate and tenure. This is the amount you’ll need to budget for, starting immediately after the mortgage is activated. Make sure this fits comfortably within your income and other financial obligations.
Prepayment and settlement terms
Most lenders allow early repayment but often include conditions, such as notice periods or early settlement fees (usually up to 1% of the outstanding balance). If you think you might want to repay your loan sooner, either partially or in full, understanding mortgage prepayment is essential.
Insurance requirements
Banks in the UAE typically require life and property insurance as part of the mortgage agreement. The FOL will specify whether the bank provides this through its partners or expects you to arrange it separately. These costs will either be bundled into your monthly payments or added on top.
Additional charges
The offer letter will also outline any upfront or ongoing costs, such as mortgage processing fees, valuation charges, and DLD registration costs. These might not seem large individually, but they can add up, so it’s worth reviewing the full breakdown before committing.
Step 6: Transfer Ownership and Register the Mortgage
With the Final Offer Letter signed and your loan officially approved, the next step is to complete the legal transfer of the property into your name and register the mortgage with the Dubai Land Department (DLD). This is where ownership becomes official and the mortgage agreement is formally recorded.
What Happens at the Transfer Appointment
The property transfer usually takes place at a DLD Trustee Office. You, the seller, a representative from the bank, and often your broker or agent will attend. On the day, the bank will issue a manager’s cheque for the seller (or developer), and you’ll pay any remaining fees or mortgage down payment due at this stage.
Once all payments are settled, the DLD will issue a title deed in your name with the bank listed as the mortgage holder. This deed is your legal proof of ownership.
Fees and Final Costs
At this point, you’ll need to cover government charges such as:
DLD transfer fee (typically 4% of the property value)
Mortgage registration fee (usually 0.25% of the loan amount)
Trustee office service fee
These fees must be paid upfront, so make sure you’ve budgeted for them in addition to your down payment and bank charges.
Step 7: Start Making Monthly Repayments
With the property officially under your name and the mortgage registered, the loan enters its active phase. This is when your financial commitment to the bank begins, and regular monthly installments become part of your budget. Your first payment is typically due one month after the bank disburses the loan amount, but some banks may set a different schedule depending on your contract date.
When Payments Start
Most UAE banks will fix a repayment date each month, often linked to your salary cycle or a specific calendar date. Payments are usually auto-debited from your UAE account, and failure to maintain sufficient funds can result in penalties or bounced cheques, which may impact your credit score or even lead to legal complications in serious cases.
If your loan includes a fixed-rate period, the monthly amount will remain stable during that time. Once the loan shifts to a variable rate, your repayments may increase or decrease depending on EIBOR fluctuations.
Staying on Track
To manage your mortgage responsibly, set calendar reminders, automate payments where possible, and regularly check your bank statements or mortgage dashboard. Some banks also offer apps that allow you to monitor your repayment progress and remaining balance in real time.
If you foresee any difficulty meeting your repayment schedule due to job loss, relocation, or other financial strain, reach out to your lender early. Restructuring the loan or requesting a temporary payment deferral may be possible, but options are limited once you’ve missed multiple payments.
Can You Pay Off Your Loan Early?
Yes, most banks allow partial or full early settlement, though some charge a penalty, usually around 1% of the remaining loan amount. If your financial situation improves or you sell the property, this option may help reduce interest costs over the long term. However, always calculate whether the savings outweigh any penalties before making a large prepayment.
Check if You Qualify for a Mortgage
Before you begin comparing rates or filling out applications, it’s important to understand the mortgage eligibility criteria in the UAE. Also, go over the general requirements banks look for when issuing a home loan in the UAE. This step can save you time and help you approach the process more confidently.
Age, Income, and Employment Stability
Lenders typically assess your age, income, and employment history as a starting point. Most banks require borrowers to be at least 21 years old, with the loan repaid in full before the retirement threshold, usually 65 for salaried employees. A steady monthly income is essential, often starting around AED 10,000.
For self-employed individuals, higher earnings and at least two years of business operations may be required. Bank statements, salary certificates, pay slips, or trade licenses help prove your financial standing.
Credit Score and Borrowing History
Your credit report is a critical part of the eligibility check. UAE banks use Al Etihad Credit Bureau data to review how reliably you’ve handled debt in the past. Late mortgage payments, high credit card balances, or previous defaults can negatively impact your chances. Even a lack of credit history may be a concern, since lenders often prefer borrowers with a track record they can evaluate.
Residency and Loan-to-Value Limits
Your residency status directly affects how much you can borrow. UAE nationals typically qualify for up to 85% financing, while expat residents may be approved for up to 80% on properties under AED 5 million. Non-residents face stricter criteria and may be limited to borrowing 50–60% of the property value. Regardless of category, borrowers must cover the remaining amount as a down payment, along with additional fees and charges.
How to Check Before You Apply
If you’re unsure about where you stand, consider starting with an eligibility check or informal pre-qualification through a bank or mortgage advisor. This won’t commit you to anything but can give you a clear idea of your borrowing capacity, so you can search for properties within a realistic price range.
FAQs About Getting Mortgage in Dubai
Before you start the mortgage process, it helps to understand the basics. These frequently asked questions cover key details expats need to know.
1. Can expats buy property in Dubai?
Yes, expat residents are allowed to purchase property in Dubai, but only within designated freehold areas. Non-resident foreigners can also invest in Dubai real estate, provided they meet certain legal and financial conditions.
2. Can expats get a mortgage in Dubai?
Yes, expats, both residents and non-residents, can apply for a mortgage in Dubai, provided they meet the lender’s eligibility criteria.
3. How much is the minimum down payment for a mortgage in Dubai?
The required down payment depends on your residency status and the property’s value. For properties priced up to AED 5 million, the minimum down payment is:
20% for UAE nationals
25% for expat residents
If you already own a mortgaged property, the minimum down payment increases to:
35% for UAE nationals
40% for expats
4. How do mortgages work in Dubai?
Under UAE mortgage regulations, expats can finance up to 80% of the property's value through a home loan, which means they must cover the remaining amount as a down payment. For ready properties below AED 5 million, that means a 25% down payment for expats. Mortgage rules vary slightly for off-plan properties. Opting for a mortgage instead of an all-cash payment allows buyers to maintain liquidity while investing in real estate.
5. How long does it take to get a mortgage in Dubai?
The mortgage approval process typically takes around two weeks (about 10 working days). This includes the time needed to obtain a pre-approval and finalize the mortgage offer letter from the bank.
6. What does the 1% payment plan in Dubai mean?
The 1% payment plan in Dubai allows buyers to purchase a property by paying just 1% of the total price each month during the construction period. An initial down payment is usually required, but the remaining amount is spread out in manageable monthly installments until completion.
Conclusion
Ready to take the next step toward homeownership in Dubai? With a vibrant real estate market and favorable mortgage options, now’s the perfect time to make your move. From pre-approval and property valuation to final loan terms and registration, understanding each stage of the mortgage process in Dubai is key to making confident financial decisions. Clear documentation, realistic budgeting, and awareness of regulatory steps can help ensure a smooth property purchase.
Ready to buy property in Dubai? The mortgage process can be tricky, but Kredium is here to help, from pre-approval all the way to final registration. Don’t go it alone. Contact Kredium’s mortgage advisors today and make your Dubai property dreams come true.
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