1. Home
  2. Dubai real estate market
  3. Comment faire un crédit immobilier à Dubai ?
Your search results

How to obtain a mortgage in Dubai?

Guillaume Giroux on 8 december 2024
Close-up view of a modern building with large reflective windows, showing part of a sign reading "BANK" in metallic letters - ideal for those wondering how to take out a mortgage in Dubai. The sky and clouds are reflected in the windows.

Dubai is a popular destination forproperty investment, attracting both local and international buyers. Whether you're looking for a primary residence or a rental property, obtaining a mortgage can make this investment more accessible. This detailed article guides you through the steps, criteria and best practices for obtaining a mortgage in Dubai.

Simulate my credit

Why invest in Dubai?

Dubai offers a dynamic real estate market with high rental yields, no income tax, and modern infrastructure. Here are some key advantages:

  • High return on investment (ROI): Net rental yields in Dubai often exceed 6-8%.
  • Attractive taxation: No tax on rental income or capital gains
  • Stable market: Strict regulations protect investors against risk.
  • Attractiveness for expatriates: Over 90% of the population is expatriate, creating strong rental demand.
  • Residence visa: Real estate investors can benefit from a residence visa for up to 10 years.

General conditions for obtaining a mortgage

Eligibility criteria for expatriates

  1. Minimum and maximum age: Generally speaking, you must be between 21 and 65 years of age at the end of the credit period.
  2. Minimum monthly income: Banks often require a minimum income of AED 15,000.
  3. Professional status: Employees and entrepreneurs are eligible, but the criteria differ.
  4. Credit history: A good credit score is essential for obtaining a loan at an attractive rate.

Special conditions for local residents

Emiratis often benefit from more flexible conditions, including lower interest rates and higher loan amounts.

Step 1: Understanding home loans

1. Fixed-rate mortgage

The interest rate remains constant for a defined period (usually 1 to 5 years). This offers predictability of monthly payments.

2. Variable-rate mortgage

The interest rate is indexed to the market. Although monthly payments may vary, this type of loan can offer savings if rates fall.

3. Mixed mortgage

Combines a fixed rate for an initial term, followed by a variable rate. Ideal for those seeking a balance between stability and flexibility.

Step 2: Determine your borrowing capacity

Borrowing capacity depends on your income, your existing debts and the term of the loan.

Debt-to-equity ratio

The Central Bank of the United Arab Emirates imposes a strict rule: your monthly repayments must not exceed 50% of your net income.

Example:

  • Net monthly income: AED 20,000
  • Possible refunds: Maximum AED 10,000

Initial deposit

The minimum deposit is usually :

  • 20% for expatriates.
  • 15% for local residents.
  • 30% for purchases worth more than AED 5M

Please note that you will not be able to finance the ancillary costs of your property purchase:

  • 4% notary fees in Dubai and 2% in Abu Dhabi
  • 2% agency commission for off-plan purchases
  • ancillary costs associated with transfer of ownership and credit registration

For a purchase on the secondary market, you'll need a minimum down payment of 26% if you live in France, and 56% if you live abroad.

Step 3: Choosing a bank or lender

Dubai offers a variety of local and international banks offering home loans. Here are a few popular banks:

  • Emirates NBD: Renowned for its competitive rates and customer service.
  • Mashreq Bank: Tailor-made solutions for expatriates.
  • HSBC: Ideal for international customers.
  • RAK Bank: very flexible with international investors
  • Fist Abu Dhabi Bank (FAB) and Emirates Islamic Bank: for ethical financing without RIBA

Compare financing offers

Step 4: Prepare the necessary documents

Standard documents for expatriates

  1. Passport with residence visa.
  2. Emirati identity card.
  3. Proof of address (electricity or telephone bill).
  4. Salary slips for the last 3 to 6 months.
  5. Bank statements for the last 6 months.

Documents for contractors

  1. Commercial license.
  2. Financial statements for the past two years.
  3. Proof of regular income.

Step 5: The mortgage application process

  1. Prequalification
    Before looking for a property, get a prequalification to find out your borrowing budget.
  2. Property appraisal
    The bank appoints an appraiser to determine the value of the property.
  3. Application submission
    Submit all required documents to the bank. This process may take 1 to 2 weeks.
  4. Approval and disbursement
    Once approved, the loan amount is transferred directly to the seller.

Step 6: Understanding associated costs

Initial costs

  • Evaluation fees: Between AED 2,500 and AED 3,500.
  • Application fees: Approximately 1% of the loan amount.
  • Registration fee: 0.25% of credit amount in Dubai

Recurring expenses

  • Interest: Varies according to the type of loan and the rate applied.
  • Mortgage insurance: Mandatory to protect the borrower and the bank.

Step 7: Tips for getting the best home loan

  1. Improve your credit score: Make sure your existing debts are well managed.
  2. Compare rates: Don't limit yourself to a single bank; explore all the options available.
  3. Negotiate: Some banks offer discounts on fees or interest rates to attract customers.

Step 8: Alternatives to mortgages

Direct payment to the developer

Some developers offer flexible payment plans directly, often without interest. This can be an interesting alternative for expatriates.

Partnership

Partner with an investor to share costs and maximize profits.

Conclusion

Taking out a mortgage in Dubai may seem complex, but with the right information and careful planning, it's an achievable process. By understanding the conditions, comparing offers, and preparing your documents in advance, you increase your chances of obtaining a favorable loan.

Dubai remains an attractive destination for property investment thanks to its growing market and lucrative opportunities. Whether you're an expatriate or a resident, this guide will help you navigate the process of obtaining a mortgage.

Start exploring your options today and make your Dubai real estate investment dream come true!

 

Simulate my credit
Guillaume Giroux
Article written by :
Guillaume Giroux, Dubai Immo founder and real estate expert, Dubai, UAE

As founder of the Dubai Immo Group and a real estate investor, I bring you daily updates on the Dubai market. My aim is to provide you with all the keys you need to invest wisely and securely, by sharing my in-depth analysis and strategic advice.

My selection