How much can you borrow for a home in the UAE, and what Dubai charges

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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A buyer in the United Arab Emirates usually starts with the price of the home. The lender starts somewhere else: with a set of ceilings written by the Central Bank of the UAE, which decide how much of that price can be borrowed, how large the loan may be against the buyer's income and how long it may run. A bank can lend less than those ceilings allow. It cannot lend more.

The ceilings are federal, so they are the same in Dubai, Abu Dhabi and every other emirate. What happens next is local. In Dubai, a mortgage has no legal effect until it is entered in the registers of the Dubai Land Department, and the emirate's own mortgage law and fee schedule govern how that is done, what it costs and what follows if the loan is not repaid. This guide takes the two layers in turn: first the federal limits on the loan, then the Dubai rules on the mortgage.

Central Bank of the UAE, Regulations Regarding Mortgage Loans; Dubai Executive Council Resolution No. 30 of 2013. The 80% applies to a first home valued under AED 5 million.

Who sets the limits, and whom they bind

The rules sit in one text: the Regulations Regarding Mortgage Loans, issued by the Central Bank of the UAE as Circular 31 of 2013 and published in the Central Bank's rulebook. They have been in force since late 2013 and were amended by two later resolutions of the Central Bank's board, one in 2019 and one in 2020; the rulebook carries a consolidated second version dated 8 April 2020. The circular withdrew an earlier notice on the subject issued in 2012.

The regulations do not address borrowers directly. They bind what the text calls mortgage loan providers: banks, finance companies and any other institution that provides mortgage loans. A buyer meets them as conditions in a loan offer, but the duty to respect them belongs to the lender.

A mortgage loan, as the regulations define it, is a loan secured on residential property and made to build, buy or renovate a home, whether the borrower will live in it or let it. Land bought or developed for the same purposes is covered too. Two ratios do most of the work. The loan-to-value ratio, or LTV, is defined as the outstanding loan divided by the appraised value of the property. The debt burden ratio, or DBR, is the borrower's debt payments set against income.

Islamic home finance is inside the same frame. The regulations say that providers of Shari'ah-compliant mortgages follow the requirements of their Shari'ah advisory committee for each form of financing and comply with these regulations as well.

One article gives the Central Bank room to move. It may change any of the ratios, for the whole market or for a single provider, and it says it expects lenders to look at the substance of an arrangement over its form. The figures in this guide are those in the consolidated text as it stands on the rulebook in October 2026.

The loan-to-value caps

The LTV cap depends on three things: whether the borrower is a UAE national or an expatriate, whether the home is a first home or something else, and whether the value passes AED 5 million. A fourth test overrides the other three: whether the property is finished.

The first-home rates are tied to owner occupation and to one property per borrower. A second home, a third, or any property bought to let falls into the lower row, and there the value of the property no longer matters: 65% for a UAE national and 60% for an expatriate, whatever the price.

The wording of the value band is not identical for the two groups, and it is worth reading closely. For UAE nationals the higher rate applies to a property worth AED 5 million or less. For expatriates the text says less than AED 5 million, and the lower rate applies above AED 5 million. The regulations therefore do not say in terms which rate an expatriate gets on a home valued at exactly AED 5 million. That is a question for the lender.

The band also works as a cliff, not as a sliding scale: the lower rate applies to the whole value once the threshold is passed. A worked example shows the effect for a UAE national buying a first home. At a value of AED 5,000,000, the cap of 85% allows a loan of AED 4,250,000 and leaves AED 750,000 to find. At a value of AED 5,100,000, the cap of 75% allows AED 3,825,000 and leaves AED 1,275,000 to find. The home is AED 100,000 dearer and the buyer's own contribution is AED 525,000 higher.

What the value is, and where the deposit comes from

Because LTV is measured against the appraised value, the valuation matters as much as the price agreed between buyer and seller. The regulations require an independent, on-site valuation by a qualified third party before the lender makes any commitment it cannot withdraw. Each lender keeps a list of valuers approved by its board. The appraisal must not build in an expected rise in prices: the home is valued as it is, not as it might be worth later.

The practical consequence is plain arithmetic. The percentages in the table are applied to the appraised value, so a valuation below the agreed price lowers the largest loan available and raises the amount the buyer must bring. The regulations do not say how a lender treats a valuation above the price; that is a matter of each lender's policy.

The regulations also say where the deposit must come from: the borrower's own resources. A down payment funded by a personal loan or a credit card is ruled out. For an expatriate buying a first home under AED 5 million, that means at least 20% of the value is the buyer's own money; for an investment purchase, at least 40%; for an off-plan purchase, at least 50%.

Two questions buyers often ask are not answered by the regulations as published. They do not say whether the fees of a purchase can be added to the loan, and they contain no separate rule for borrowers who live outside the UAE. Neither point could be confirmed on a primary source for this guide, and both depend on the lender.

The income limits: a multiple and a ratio

Property value is only the first ceiling. The second is income, and it comes in two forms that apply together.

The first is a cap on the size of the loan. Under the regulations, the maximum financing is eight times annual income for a UAE national and seven times annual income for an expatriate. An expatriate with an annual income of AED 240,000 can therefore be lent AED 1,680,000 at most, however valuable the home and however large the deposit.

The second is the debt burden ratio. The regulations take it from the Central Bank's rules on lending to individuals: a borrower's debt payments may not exceed 50% of gross salary and any regular income from a defined and specific source. The ratio covers the burden of debt as a whole, so existing loans and cards take up room that the mortgage would otherwise use. A borrower earning AED 20,000 a month can carry debt payments of AED 10,000 a month at most, the home loan included.

What counts as income is defined with some care. The regulations ask for income that is reliable and sustainable, and say that bonuses and other payments that are not guaranteed should be discounted or left out. A buyer whose pay is largely variable may find that the income a lender counts is well below the income received.

The two tests do not replace each other. The text states that the 50% DBR still applies when the income multiple is used, so a loan must pass both.

Stress tests, rental income and retirement

The DBR is not tested only at the rate on offer. The regulations require lenders to stress test the loan at two to four percentage points above the current rate, the margin depending on where the rate cycle stands. As an illustration only: a loan offered at a rate of 4% would be tested at a rate between 6% and 8%. The figure of 4% is an assumption made to show the mechanism, not a market rate; no current lending rate is given on the primary sources used for this guide.

Where a loan starts with an introductory rate, the test is run against the rate that applies once the introductory period ends. A low opening rate does not, in other words, enlarge the loan.

Investment property has a rule of its own. Rent can count as income, but the regulations say at least two months of rental income are to be deducted in the DBR calculation. On an illustrative annual rent of AED 120,000, two months come to AED 20,000, so no more than AED 100,000 is counted. The deduction allows for the weeks in which a let property earns nothing.

Retirement is the third check. If the loan runs beyond the borrower's retirement, the regulations require that the balance still outstanding at that point can be serviced within a 50% DBR measured on post-retirement income. A long term taken late in a career is tested on the pension, not only on the salary.

Term, repayment and interest-only loans

The longest term the regulations allow is 25 years. There is no fixed age limit in the text: the maximum age of the borrower at the final repayment is left to each provider's own risk and lending policy, which is why the answer differs from one lender to the next.

Repayment must come from the borrower's salary or from verifiable business or rental income. The regulations exclude end-of-service benefits as a source of repayment, so a loan cannot be built around a lump sum due when employment ends. Principal and interest are repaid on a reducing balance, and payments must be made at least every quarter.

Interest-only lending, which the regulations call deferred principal repayment, is permitted for investment loans alone. Even there, the principal may not be deferred for more than five years from the first drawdown. A loan on a home the borrower lives in repays principal from the start.

On security, lenders must hold a first-ranking mortgage in their own name over every property they finance. The exception is government housing schemes in which a first charge cannot be created; there, the regulations tell lenders to look for other protection, such as a second charge where one is possible.

Three limits on one purchase: a worked example

The limits bite in different cases. The table below is a worked example with assumed figures: two expatriate buyers, each buying a completed first home appraised at AED 2,000,000, which is also the agreed price. One earns AED 20,000 a month, the other AED 12,000. Neither figure is market data.

For the first buyer the property decides: the income would support a slightly larger loan, but the LTV cap stops it at AED 1,600,000. For the second the income decides, and the gap is wide. The same home needs AED 992,000 of the buyer's own money instead of AED 400,000.

Neither result is final until the monthly payment is tested. The payment on the loan, calculated at the stressed rate and added to the borrower's other debt payments, has to fit under the monthly ceiling in the last row. A buyer with a car loan or card balances can pass the first two tests and still be offered less.

Changing one assumption shifts the picture again. If the same AED 2,000,000 home were bought to let by a buyer who already owns one, the cap would be 60% for an expatriate, or AED 1,200,000, and 65% for a UAE national, or AED 1,300,000. Bought off-plan, it would be 50% for anyone: AED 1,000,000.

Housing programmes for UAE nationals

The regulations treat government housing programmes separately. The Central Bank says it will deal directly with those programmes and seek preferential treatment for loans the government guarantees.

Two ratios move as a result. Where a UAE national buys or builds a home to live in under a local housing programme, with a loan guaranteed by the government, the maximum DBR rises from 50% to 60%. On the income of AED 20,000 a month used above, the monthly ceiling for all debt would be AED 12,000 instead of AED 10,000. The maximum LTV, the regulations add, may rise to 85% where the property is worth AED 5 million or less.

Dubai also runs a First-Time Home Buyer programme through the Dubai Land Department. It is a different kind of measure: it does not alter the Central Bank's ratios. The department's programme page lists five participating banks, namely Commercial Bank of Dubai, Dubai Islamic Bank, Emirates NBD, Emirates Islamic and Mashreq Bank, and describes what they offer as better rates, preferential fees and faster approvals.

Registering the mortgage in Dubai

Once a loan is agreed, the security has to be created, and here the emirate's law takes over. In Dubai that is Law No. 14 of 2008 Concerning Mortgage, published on the Dubai Legislation Portal.

The law first limits who may lend against Dubai property. The mortgagee, the creditor in whose favour the mortgage is made, must be a bank, or a financing company or institution, licensed and registered with the UAE Central Bank to provide property financing. The mortgagor, the person who grants the mortgage, must own the property and have the capacity to dispose of it, and may be either the debtor or a third party who puts up property as surety for the debt.

Registration is what gives the mortgage life. The law says a mortgage takes effect only when it is registered with the Dubai Land Department, and that any agreement to the contrary is void. The application is signed by the mortgagor, the mortgagee and any surety, and states the details of the property, its value, the amount of the debt, the term of the mortgage and the particulars of the parties. The contract is drawn up on the department's own form, and the department then delivers a signed and sealed deed; an electronic deed carries the same weight as evidence as a written one. According to the Dubai Land Department's service pages, registration is carried out at its Registration Trustee offices.

Rank follows registration. Where more than one mortgage is registered over a property, priority is fixed by the order of registration, and the mortgage secures only the amount stated in the contract unless the law or the agreement provides otherwise.

Three special cases are written into the law. A buyer of off-plan property may mortgage it only if the property is entered in the Interim Real Property Register, the department's record of off-plan sales. The holder of a usufruct or of a long lease of 10 to 99 years may mortgage that interest for its term. And the holder of a musataha, a right to build on another's land, may mortgage the buildings for the term of the right, though not the land unless that is agreed.

The fees are set by Dubai Executive Council Resolution No. 30 of 2013, which approves the fees of the Land Department.

The mortgage fee is charged on the debt, not on the property. On the first buyer in the worked example, a loan of AED 1,600,000 gives a registration fee of AED 4,000. Under the mortgage law, the mortgagor pays the registration fees unless the parties agree otherwise. The sale itself is a separate transaction: the resolution sets its fee at 4% of the sale contract value, AED 80,000 on a price of AED 2,000,000, split equally between seller and purchaser unless they agree otherwise. Whether any of these fees can be financed is, as noted above, not settled by the texts read for this guide.

Home finance structured as rent-to-own has its own line in the schedule: 4.25%, made up of 4% of the property's value and 0.25% of the total value of the rent-to-own contract.

Living with a registered mortgage

A registered mortgage does not take the home out of the owner's hands. Under the Dubai mortgage law, the mortgagor manages the property and keeps its income. What the owner loses is the freedom to dispose of it alone: a sale, a gift or the grant of any right over the property needs the mortgagee's approval, and whoever takes the property takes on the obligations of the mortgage. In return, the owner answers for the property's safety and integrity until the debt is repaid.

That shapes a later sale. The Dubai Land Department states on its service page that the fully digital sale offered through the Dubai Now application is not available for a mortgaged property, so a seller with a loan outstanding uses the other registration routes. A mortgage also shows up in residency paperwork: for a golden visa application based on a mortgaged property, the department asks for a no-objection letter from the bank stating the amount already paid and the balance remaining.

The Central Bank's regulations protect the borrower on the loan itself. The terms of a mortgage loan cannot be changed during its life without the borrower's written agreement. Changes to fees or commissions must be notified at least two months before they take effect. Borrowers are to receive clear information on costs, risks, fees and rates, with a detailed schedule of fees attached to the contract; they sign each page of the loan documents and receive a fully signed copy.

Leaving early is a right under both texts. The Dubai law allows the debtor or the surety to repay the secured debt before it falls due. The regulations cap the charge for early settlement or refinancing at the lender's actual cost, such as the cost of breaking a fixed-rate loan, or at the fees set under the Central Bank's Regulations No. 29 of 2011, and they say borrowers may refinance with another institution without obstruction. Those 2011 fee caps were not read for this guide, so no figure is given here. When the debt is repaid in full, the mortgage ends, and its discharge is recorded at the fixed fee shown above.

If the payments stop

The Dubai mortgage law sets out one route for enforcement, and it starts by closing two shortcuts. A clause that would hand ownership of the home to the lender on default is void, and so is a clause allowing the lender to sell without going through the legal procedure. The mortgage stays valid without them.

The debtor has one opening to slow the process. On a request from the debtor or the surety, the execution judge may postpone the auction once, for up to 60 days, where the debt can be repaid within that time or where the sale would cause gross damage. Subject to that, the law requires the auction to be held no later than 30 days after the relevant period expires.

The proceeds are distributed by rank. If they do not cover the debt, the law allows the creditor to claim the shortfall from the debtor. The order of recourse runs the other way too: the debt must be enforced against the mortgaged property before the creditor turns to the debtor's other assets.

The loan is capped three times before it is offered: by the value of the home, by the borrower's income and by the term. The mortgage that secures it exists only once it is registered.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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