An aerial view of Atlantis, The Palm hotel in Dubai.

Late mortgage payments in the UAE

Once you have secured your mortgage and purchased your property in the UAE, you have the great responsibility to plan your finances well and pay your monthly installments on time. Failure to pay on time may result in minor or major consequences, depending on how many payments you make late. Read below to learn what happens if you miss your mortgage payments for a property purchased in the UAE.

What are the effects and consequences of late mortgage payments?

In UAE, you are considered a defaulter if you fail to pay your mortgage loan on time and do not clear your outstanding debt within the due date. Failure to meet your mortgage loan payment deadline could have serious consequences that vary from bank to bank because each bank determines its own terms and conditions regarding late and non-payments.

Banks and financial institutions categorize personal loan defaults into two types:

  • Major defaults – when you haven’t made a payment in more than 90 days.

  • Minor defaults – when you haven’t made a payment in less than 90 days. 

Missing a mortgage payment can lead to the following consequences:

  • Negative impact on your credit score - the credit score represents the likelihood of you paying your debts on time and each time you fail to do so, it decreases your credit score which is also recorded in your credit report, affecting your creditworthiness (one of the first eligibility criteria for obtaining loans in the future) 

  • Additional penalties and fees - if you failed to make your payment before the due date you will need to pay the “late payment fees”, which vary from bank to bank. In the event that you frequently pay late, you will be charged additional fees for the unpaid amount.

  • Debt recovery - Banks and financial institutions send recovery agents to try to recover the funds whenever there is a serious default on a loan. 

What can you do to avoid late payments?

There are several things you can do to avoid unnecessary stress, inconvenience and additional costs that come with late payments. One thing is to plan your finances better, either with someone or on your own, with a vast number of applications and online resources that can make your life easier. 

On the other hand, you can ask the bank for a lower monthly installment. They will probably grant you this but will extend the loan tenure or will convert an unsecured loan to a secured one. Another great way to ensure you’re capable of making monthly payments on time is to make partial payments and ease the financial burden. Sometimes, in special circumstances, a bank can also give you a 3 to 6-month waiver on payments, after which you must resume making payments on time.

UAE Banks - late payment fees

The table below shows how much major UAE banks charge if you make late payments on your mortgage:


Late payment fee

Abu Dhabi Commercial Bank

3.15% of the delayed amount, maximum AED 375 per month

Abu Dhabi Islamic Bank


Ajman Bank

2% of the late amount, maximum AED 200

Arab Bank

4% of the delayed amount minimum AED 300 and max of AED 700

Commercial Bank of Dubai

2% in addition to the penal interest, AED 200 per past - due amount occurrence with maximum penal interest capped at AED 700

Dubai Islamic Bank

Up to AED 210

Emirates Islamic Bank

AED 735 per installment

Emirates NBD

AED 420

First Abu Dhabi Bank

2.10% of the overdue amount, minimum AED 52.50 - maximum AED 210



Mashreq Bank


National Bank of Fujairah

2% of monthly EMI (Equated monthly installment), minimum AED 200 - maximum AED 700


AED 700 per delay in installment payable until payment is made

Standard Chartered Bank

1% of the amount of principal and interest outstanding in respect of that overdue sum as of the relevant payment due date each time you fail to repay the monthly repayment

United Arab Bank

2% of the installment, minimum AED 50, maximum AED 700

Next steps

It is important to understand the consequences of late payments before borrowing, as well as the risks involved in every form of debt. Maintaining a healthy credit history means staying disciplined when it comes to your payments, and by responsibly planning your finances you are able to enjoy your life to its fullest and keep your payments on schedule.

Feel free to contact our mortgage experts if you need help understanding the terms and conditions of your mortgage in the UAE. We’re here for you and we can also help you manage your finances or find a mortgage refinancing option better suited to your financial situation.

Photo credits:

  1. Christoph Schulz | Unsplash