The United Arab Emirates has become an increasingly popular destination for expats, especially in business-friendly areas such as Dubai and Abu Dhabi

In recognition of this trend, the mortgage market in the UAE is now well-established, with international and local lenders offering home loans to expats. Both residential and buy-to-let mortgages are available to foreign nationals living in the UAE, although their criteria vary.

Resident expat, UAE national & nonresident buyers can get a mortgage in the United Arab Emirates, but need to meet certain criteria.

Employed residents in the UAE need to be confirmed with their respective employers.

Self-employed borrowers will need to have their business registered/running for at least one year. It can also be beneficial to have an existing record with any of the banks.

Employer could be a big factor as an advantage to avail the mortgage facility, some banks will accept applicants who work for specific companies. However still you can get the mortgage according to other factors.

Furthermore, it is important to have a clean credit record to apply for any bank facilities, as lenders tend to reject applicants with poor or non-existent credit records. With this in mind, you shouldn’t apply for a mortgage until you have checked your credit report and rectified any concerns

Mortgages in the UAE are available on a first & second degrees (local only) at fixed-rate or variable-rate basis.

Fixed terms are usually around five years (could be more based on banks policies), although they can be as short as one year. At the end of the fixed term, the facility moves on to the bank’s variable rate.

Fixed-rate mortgages allow you to have certainty about the size of your repayments for a set amount of time, but it’s worth considering a variable rate deal if interest rates look likely to fall. Terms are generally set at 25 years, and the loan will usually need to be repaid before the age of 70.

Resident Expats taking out a residential loan will need a deposit of at least 20% if they are buying a first property worth up to AED 5 million and 30% deposit of the property value exceeds AED 5 million.

UAE national taking out a residential loan will need a deposit of at least 15% if they are buying a first property worth up to AED 5 million. More expensive homes will require a deposit of at least 25%.

If you are looking to invest in a property and rent it out, you will need a mortgage facility, which will require a much higher down-payment of around 35-50%.

Borrowing is capped in a variety of ways. The maximum amount you can borrow cannot be more than 7 multiples of your annual salary for resident Expats and 8 multiples of your annual salary for UAE national.

Mortgage payments are capped at 50% of your monthly income

When applying for a mortgage, the documents you will need may vary depending on banks

Lenders are likely to ask you for the following:

• KYC documents soft copies (PP, EID & Family Book for UAE Nationals)
• Financial documents, such as proof of salary, bank statements, Trade license & Audited financials.
• Property documents (SPA, MOU, TD , SOA & seller PP copies)

When taking out a mortgage in the UAE, you will need to pay a fee of 0.25% of the loan amount to register the loan in Dubai land department (it may vary based on property location/emirate). Your lender may also charge you a valuation fee, monthly life & property insurance, bank processing fees.

Mortgages are granted based on a mutually agreed repayment schedule in the UAE. These agreements involve paying a set amount each month for the duration of the mortgage term up to 25 to 30 years. You will usually pay by setting up a direct debit from your bank account on the same date each month.

Payment is always taken monthly and usually has a portion of interest & principle amount each month.