The Minimum Legal Requirements For a Mortgage in Dubai

Excerpt From Buy in Dubai:

Before you or your mortgage broker can approach a bank, there are a few government-regulated rules that must be adhered to. The following requirements are for expats, with nationals getting slightly more favourable terms.

1. As of November, 2013, expats can only get a mortgage for up to 75% of the property value. This is for properties valued at less than 5 million dirhams. For properties more than 5 million, expats can only get a mortgage of 65% of the property value.

2. For a second mortgage, banks only finance up to 60% of a property’s value.

3. Banks only finance off-plan property up to 50% of the value. Saying this, it might be very difficult to find a bank willing to finance a property off-plan. The majority of off-plan property is purchased with cash.

4. A borrower’s in-country (i.e. UAE) EMI (equated monthly installment) must not exceed 50 per cent of his or her monthly income plus housing allowance. Mortgages and income in other countries may not be considered or calculated. For example, if your salary plus housing allowance is 25,000 dirhams per month, you can only direct 12,500 dirhams per month towards all loans - housing or otherwise.

5. The maximum term for a home loan is 25 years or the number of years before you turn 65. For example, if you are 45 years old, you can only get a 20 year home loan.

6. The total loan amount can not be more than the total of 7 years’ income. For example, for someone who makes 25,000 dirhams a month, the maximum loan would be 3,600,000 dirhams.