UAE: How Much Mortgage Can Dubai Property Buyers Ask For?

0

(MENAFN – Khaleej Times)

Posted: Mon 01 Aug 2022, 04:21 PM

Last updated: Mon, Aug 1 2022, 4:58 PM

As interest rates rise in the UAE, property buyers are increasingly opting for cash purchases over mortgages. According to the latest Betterhomes report, the UAE saw a 1.75% increase in interest rates in the first half of 2022. It said that around 31% of property purchases were financed by mortgages in the first half of the year. 2022, compared to 36% during the same semester. period of last year.

Mortgages are readily available to foreign residents in Dubai, with over twenty financial institutions currently offering over 2,500 different mortgage products/rates.

Andrew Cummings, Partner – Head of Prime Residential, Middle East, Knight Frank, says that for first-time purchases, the maximum loan amount on properties over MAD 5 million is 70% of the property value, which increases to 80% for properties worth less than 5 million dirhams.

Andrew Cummings

Some banks also offer fee financing, which means borrowers can finance up to an additional 5% to fund transfer/agent fees. For second purchases/investment properties, the maximum loan amount is 60% and for buildings under construction, it is 50%, regardless of the value of the property.

Do banks in the UAE also finance the down payment? Cummings technically says no.

“Personal loans are available as unsecured credit to cover funding gaps, however, the interest rate charged is usually higher than mortgage rates and the repayment period is shorter, therefore, it is not is not the most efficient/cost effective route to finance the down payment.Also, personal loans in the UAE will show up on your credit report and will therefore be included in your mortgage affordability calculation, which means that the maximum amount of your available mortgage will be reduced.

READ ALSO :

  • United Arab Emirates: Everything you need to know before and after buying property in Dubai
  • Dubai real estate market records highest sales volume in nine years in June
  • Abu Dhabi: The tenant must pay 300,000 Dh for the subletting of the villa, creating illegal partitions

MENAFN01082022000049011007ID1104628153


Legal disclaimer: MENAFN provides the information “as is” without warranty of any kind. We assume no responsibility for the accuracy, content, images, videos, licensing, completeness, legality, or reliability of any information in this article. If you have any complaints or copyright issues related to this article, please contact the provider above.

Share.

Comments are closed.