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ArticlesA mortgage is a loan secured against residential property for purposes such as buying, constructing or renovating a home or investment property. UAE mortgage lending is regulated by the CBUAE, including maximum Loan-to-Value ratios and affordability requirements. The property secures the loan, but borrowers remain responsible for repayments and other contractual obligations.
How a UAE mortgage works
The lender finances part of the property value and the borrower contributes a down payment from their own resources. The property is taken as collateral. Repayments are made over an agreed tenor and typically include principal plus interest or profit. The lender also assesses income, liabilities, credit information and the appraised property value before approval.
Current maximum LTV for a first owner-occupied home
| Borrower / property value | Maximum LTV |
|---|---|
| UAE national — property ≤ AED 5m | 85% |
| UAE national — property > AED 5m | 75% |
| Expatriate — property ≤ AED 5m | 80% |
| Expatriate — property > AED 5m | 70% |
These are maximum regulatory LTVs for the first-house/owner-occupier category under the current consolidated mortgage regulation. Other categories, including subsequent properties and investment properties, have different limits. A lender can require a larger down payment than the regulatory minimum.
What is the down payment?
The down payment is the portion of the purchase price funded by the buyer rather than the mortgage. CBUAE mortgage rules state that the required down payment should come from the borrower’s own resources and not from other borrowing such as personal loans or credit cards.
How does DBR apply?
Mortgage providers must assess the borrower’s ability to repay. The current regulatory framework refers to a maximum DBR of 50% of gross salary and regular income for relevant non-retired borrowers, while also requiring lenders to consider the borrower’s actual circumstances rather than automatically lending to the maximum. Mortgage affordability assessments also include stress testing for interest-rate changes.
Property valuation and collateral
LTV is based on the appraised value used by the lender under the regulatory framework, not simply on the price a buyer wants to pay. A professional valuation helps the lender assess collateral risk and determine the maximum loan that can be supported by the property value.
Fixed, variable and introductory rates
Mortgage pricing can be fixed for a period, variable against a benchmark/base rate, or structured with an introductory rate followed by a different rate. Borrowers should compare what happens after any initial fixed or promotional period, how frequently a variable rate can reset, and the effect on monthly payments.
Early settlement and partial settlement
The current CBUAE Consumer Protection Standards annexure lists home-loan/financing early-settlement and partial-settlement charges at a maximum of 1% of the outstanding balance or AED 10,000, whichever is less. Actual lender charges may be lower and should be confirmed in the KFS.
Illustrative LTV example
Illustration only: an expatriate buying a first owner-occupied home appraised at AED 2,000,000 falls within the ≤ AED 5 million category. The regulatory maximum LTV is 80%, which corresponds to a maximum mortgage of AED 1,600,000 and at least AED 400,000 of property-value contribution before transaction costs. A bank can still offer a lower LTV based on affordability or policy.
Costs beyond the down payment
The down payment is not the only cash requirement. Buyers may also face valuation, property-registration, mortgage-registration, brokerage, insurance and other transaction costs depending on the purchase and emirate. These costs should be budgeted separately and verified for the specific transaction.
Frequently asked questions
What is the maximum mortgage LTV for an expatriate first home in the UAE?
Under the current CBUAE rules, the maximum is 80% for a first owner-occupied property valued at AED 5 million or less and 70% when the value is above AED 5 million.
What is the maximum LTV for UAE nationals?
For a first owner-occupied home, the current maximum is 85% at AED 5 million or less and 75% above AED 5 million.
Can I fund my mortgage down payment with a personal loan?
CBUAE mortgage rules state that the required down payment should come from the borrower’s own resources rather than other borrowing such as personal loans or credit cards.
Does the maximum LTV mean the bank must lend that amount?
No. It is a regulatory ceiling. The bank still assesses affordability, credit history, property valuation and internal policy.
What is the mortgage early-settlement fee cap?
The current CBUAE fee annexure lists a maximum of 1% of the outstanding balance or AED 10,000, whichever is less, for home-loan/financing early settlement.