The Guides

How to get a mortgage in Dubai

How to get a mortgage in Dubai

ADCB talks us through the process of getting a mortgage in Dubai

Words by Ruqayyah Khan & ADCB in The Guides · Jun 11th, 2017

Found your dream property but looking to finance it? According to a recent report by Reidin/Global Capital Partners., mortgages now account for 55% of real estate sales activity.  (We're not surprised, here are 5 reasons to invest in Dubai.) With this big shift in mind, Luxhabitat approached its mortgage partner provider ADCB to put together an outline of the process, regardless if you want to purchase an apartment or villa.

A Term You Should Know Before Applying

Loan To Value (Ltv) Ratio

The loan-to-value (LTV) ratio determines the loan amount you can avail against the value of the property that you intend to purchase or mortgage. In the UAE, the maximum LTV Borrower can apply for, is restricted by the Central Bank of the UAE. 

For instance. UAE nationals availing their first mortgage for a property valued less than AED 5 million, can opt for a maximum LTV ratio of up to 80% of the property value and 70% if the property value exceeds AED 5 million. Subsequent mortgages have an LTV ratio of 65%, regardless of the value of the property. 

For an expat, the maximum LTV ratio is up to 75% of the property value should the selected property be valued less than AED 5 million or 65% of the property value if it is priced higher than AED 5 million. For subsequent mortgages, the maximum LTV ratio is up to 60% of the property value. There is a restriction on the maximum tenure one can avail a mortgage for, this is usually up to 25 years – 30 years.

The Process

1. The first step in availing a mortgage is to apply for a pre-approval from a Bank. Pre-approval is an assessment of Borrower’s repayment capability based on earnings from either a company (self –employed) or salary. Once the Borrower repayment capability has been established successfully or in another words approved for financing, the Bank issues a pre-approval letter to the customer.

2. The second step in availing a mortgage is to convert the Pre-approval from the Bank to a final approval. This is done, once a property has been selected for a mortgage and Borrower submits all property related documents to Bank to evaluate along with any pending missing document required by the Bank (if any) . The Bank will evaluate the property before issuing a Final offer letter to customer.

3. Once the final offer letter has been issued to the customer, the Bank will liaise with all concerned parties (Seller, Borrower, Developer etc.) to proceed ahead with the registration of mortgage and transfer of unit.

How Long Does The Overall Mortgage Process Take?

The overall mortgage process should be completed in less than 14 working days should all documents required by the Bank are in order and the property already identified by the customer.

What Are The Fees And Charges Besides The Down Payment?

In addition to the down payment, there is mortgage registration fee that needs to be paid to the concerned Land Department for Mortgage Registration (In Dubai this amounts to 0.25% of the mortgage amount), Bank processing fee, property valuation fee and insurance registration fee.

About Flexible And Moving Mortgages

Borrowers have the flexibility of making early repayments on their mortgages. Borrowers are also allowed to shift their mortgage from one bank to another.

This is based on the reducing balance from day one. ADCB currently has the lowest five-year fixed rate, because it’s an average of 4.79 only, and you are unaffected by any fluctuations in EIBOR or LIBOR for the first five years.

Flexibility And Moving Mortgages

Vishwanath says that borrowers can settle their mortgage at any point in time. You will be able to sell the property, settle mortgage, or if you wish to make part payments at any point in time, you can without any restrictions.

Fees and charges do apply, of course. At ADCB, for the first two years, it will be up to 2% of the partially paid amount or the settlement amount. The third year will be 1%, and after three years it will be nil early settlement fees. But again, this is applicable for the five-year fixed term. If it is a the one-year fixed term, it will be 2% for the first year. The second year will be 1% and the third year will be 1% or AED 10,000, whichever is lower. After the third year, it is nil early settlement fees on non-buyout. Those numbers apply to the Aspire and Privilege categories.

There are also the Excellency and Private categories, which are priority banking. For these,the early settlement fee structure is more enhanced. For Excellency it’s 1.5% for the first two years, .75% for the third year, and after the first three years, it’s nil early settlement and partial payment fees.

Insurance Is Mandatory

Most Banks will require mandatory property insurance and life insurance to avail a mortgage. Usually the Bank arranges this requirement on behalf of the Borrower. 


The bank largely takes care of the technical details. ADCB also provides a dedicated relationship manager who will be taking care of requirements from end to end.