-mortgage--full-guide--1686563321.svg)
Abu Dhabi Islamic Bank (ADIB) mortgage: full guide
A guide to Abu Dhabi Islamic Bank mortgage offers, including their terms/conditions, typical financing offers, and application process with required documents.
Overview of terms and conditions
Abu Dhabi Islamic Bank (ADIB) was formed in 1997 and is the fourth largest Islamic bank globally by assets (USD 39 billion or AED 143 billion). It was the first Islamic bank in the Emirate of Abu Dhabi and has an extensive network in the UAE with international coverage in Egypt, Saudi Arabia, the UK, Qatar, Sudan, and Iraq. ADIB provides financial services that are Sharia’h-compliant using the principles of Ijarah (purchase and lease back) and Forward Lease Ijarah (for under-construction properties).
ADIB has various financing options:
New purchase
Construction
Buyout or re-financing takeover
Plot finance
Finance against property or equity release
New purchase | Construction | Buyout | Plot finance | Finance against property | |
|---|---|---|---|---|---|
Purpose | Buy a ready property from a developer (that ADIB works with) or from a previous owner. | Build a property on land you already own or renovate your existing property. | Transfer financing from another bank to ADIB. | Purchase property or make plot handover payments to own freehold residential plots. | Get financing against your pre-owned property or land to use for renovation/ construction/etc. |
Maximum loan-to-value (LTV) ratio | 85% of property value | 85% of property value | 80% of property value | 60% of land plot value | 80% of property value |
Maximum finance amount | AED 10 million | AED 10 million | AED 30 million for nationals and expats |
The following are the general terms and conditions for their real estate financing options:
Islamic loans only
Maximum finance amount:
For UAE nationals: AED 20 million or 8 times annual income
For resident expats: AED 10 million or 7 times annual income
Could be up to 30 million on a case-by-case basis
Salary transfer not required
Minimum salary:
For UAE nationals and salary transferred customers: AED 10,000
For non-residents and non-salary transferred customers: AED 15,000
Bank processing fee: 0.5% of finance amount
No additional bank arrangement fee
Bank valuation fee: AED 2,625
Partial/full settlement terms:
Prepayment of up to 30% of the outstanding loan amount allowed per annum
In excess of 30%, 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)
No fee for settlement during property sale
Bank transfer fee - 1.05% penalty on the exceeding amount, capped at AED 10,500 (including VAT)
Life insurance terms
0.3% per annum of the mortgage balance for single life
0.6% per annum of the mortgage balance for joint life, if both incomes used for affordability
Building insurance is included in the rate
Next, let’s look at ADIB’s financing offers for different types of customers. Keep in mind that ADIB updated the actual rates listed on November 15, 2022, and that the rates, fees, and costs may change without notice. The 1-month EIBOR rate is from the UAE Central Bank website and is current as of January 30th, 2023. EIBOR rates are updated daily and are subject to changes in the market.
Mortgages for employed borrowers
Employed borrowers can finance property purchases in all seven Emirates.
Fixed-rate offers:
5.50% fixed for 1 year
5.75% fixed for 3 years
5.99% fixed for 5 years
Reversion rate:
1-year: 1.99% fixed margin + 4.674% (1-month EIBOR) = 6.664%
3-years and 5-years: 2.25% fixed margin + 4.674% (1-month EIBOR) = 6.924%
Minimum floor rate 5.50% (1-year), 5.75% (3-year), and 5.99% (5-year)
Variable-rate offer:
1.69% fixed margin + 4.674% (1-month EIBOR) = 6.364%
Minimum floor rate of 4.25%
Other conditions/terms/fees for employed borrowers:
Service fee: AED 5,250
Have the option to postpone first rental payment for up to 6 months
Mortgages for self-employed borrowers
ADIB has a home finance product for self-employed borrowers as well. These customers may still be eligible for the same fixed-rate and variable-rate offers as those listed above for employed borrowers.
Other conditions/terms/fees for self-employed borrowers:
Service fee: AED 5,250
Minimum annual turnover of AED 3,000,000
Ready properties located in Abu Dhabi and Dubai only
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
ADIB only finances new property purchases for non-resident clients; however, the property can still be used either as a residence or an investment. Non-resident borrowers typically have more restrictions and higher fees than residents.
Variable rate offer:
2.50% margin for the life of the loan + 4.674% (1-month EIBOR) = 7.174%
If life Takaful is declined, an additional 0.25% on the margin
2.75% margin + 4.674% (1-month EIBOR) = 7.424%
0.5% bank processing fees with a minimum fee of AED 5,000
Minimum floor rate of 5.5%
Other conditions/terms/fees for non-resident borrowers:
Service fee: AED 7,500
Finance up to AED 5 million
Minimum down payment of 50% of property value
Minimum annual turnover of AED 3,000,000
Commercial mortgages
ADIB Commercial banking was established in 2013 under the Global Wholesale Banking of ADIB Group. They provide commercial funding solutions for their customers through this branch. Perhaps because their commercial branch is relatively newer, ADIB doesn’t have specific information about their commercial financing offers on their website at this time.
Application process
The first page of Abu Dhabi Islamic Bank’s home finance application form is below. A mortgage broker can guide you from the application process all the way to finalizing the loan, helping you close on a financing option more quickly and with less effort on your part.
Clients must submit certain documents to ADIB, listed in the table below so that their home financing application can be adequately processed. They may also require additional information, so it’s helpful to learn about other mortgage documents you may need to provide.
Documents required for ADIB home finance application: | |
|---|---|
Salaried: | Self-employed: |
Valid Passport & Emirates ID copy | Valid Passport & Emirates ID copy |
Valid residence visa copy (Expat residents only) | Valid residence visa copy (Expat residents only) |
Khulasat Al Qaid (Family book for UAE Nationals only) | Khulasat Al Qaid (Family book for UAE Nationals only) |
Salary Certificate | Company ownership documents |
3-month bank statement | 3-month bank statement |
Liability Letter (if applicable) | Liability Letter (if applicable) |
Property ownership documents | Property ownership documents |
To wrap up
Abu Dhabi Islamic Bank is a popular bank in the UAE, offering many Islamic financing options. However, as a borrower, it’s in your best interest to shop around and look at potential offers from various banks before making a final decision. You can either spend time researching UAE mortgage banks and lenders yourself or you can reach out to a mortgage broker. Here at Kredium, you only need to submit your documents once and then we do the hard work of contacting separate banks to provide you with personalized financing options. With international experience and insider knowledge of the UAE market, we can help nationals, residents, and non-residents become property owners.
If you’re still searching for your dream property, check out our Dubai properties for sale from the top developers in the UAE. We offer projects with guaranteed returns, serviced apartments, and many more options to fit every buyer’s needs. Use our mortgage calculator to estimate your monthly payments and potential rental profit. When you need extra help or are ready to get some personalized mortgage offers, simply register on our website or contact us to get started.
.svg){kind=small}
.svg){kind=small}