UAE mortgage rules for expats: what banks can lend

The Central Bank of the UAE sets the outer limits for every home loan in the country. Banks are free to be stricter, and many are, but none can lend outside them.

If you know these rules before you start viewing, you know your real budget. Below are the limits that decide how much an expat can borrow, with the numbers we use when we put a case together for a bank.

How much deposit you need

The first limit is the loan-to-value ratio (LTV), the share of the property's value the bank is allowed to lend. For an expat with a UAE residence visa buying a first home worth up to AED 5 million, the cap is 80%. You pay at least 20% yourself.

Buyer and property	Maximum loan	Minimum deposit
Expat resident, first home up to AED 5M	80%	20%
Expat resident, first home above AED 5M	70%	30%
Expat resident, second or further home	60%	40%
UAE national, first home up to AED 5M	85%	15%
UAE national, first home above AED 5M	75%	25%
UAE national, second or further home	65%	35%
Off-plan (under construction), any buyer	50%	50%
Non-resident	50% to 60%, set by each bank	40% to 50%

On a AED 1,800,000 apartment bought as your first home, the most you can borrow is AED 1,440,000, so the deposit is at least AED 360,000.

The bank applies the LTV to the lower of the purchase price and its own valuation. If the valuer puts that same apartment at AED 1,750,000, 80% of the valuation is AED 1,400,000. You then cover the AED 40,000 gap in cash, on top of the original deposit.

The deposit is not the only cash you need either. Transfer fees, bank charges and agent commission add another 7% to 8% of the price, and banks do not lend against them. Our guide to the cost of buying property in Dubai breaks those down line by line.

What counts as a second home

If you already own a property in the UAE, most banks will treat the next purchase as a second home and the cap drops to 60%. Tell us about everything you own at the start, including property that is fully paid off. The bank will ask, and it is better to plan around it than to find out at valuation stage.

The 50% debt burden rule

The second limit is the debt burden ratio, or DBR. Your total monthly debt payments, including the new mortgage, cannot go above 50% of your gross monthly income.

Banks count every loan on your credit report: car loans, personal loans, other mortgages and credit cards. Cards are the item that catches people out. The bank counts 5% of your total card limits as a monthly debt, even if you clear the balance every month and have never paid a dirham of interest.

Here is how it works for someone earning AED 30,000 a month:

Item	Monthly amount
50% of gross income	AED 15,000
Car loan payment	minus AED 2,200
Credit cards, 5% of AED 40,000 in total limits	minus AED 2,000
Room left for the mortgage payment	AED 10,800

If that buyer cancels a card with a AED 20,000 limit they never use, the card figure falls to AED 1,000 and the room for the mortgage goes up to AED 11,800. It is often the quickest way to borrow more, and it costs nothing.

There is a catch with that AED 10,800. The bank does not work out your mortgage payment at the rate you will actually start on. It tests affordability at a stressed rate, higher than the starting rate, to check you could still pay if rates rise. So the loan that fits inside your DBR is smaller than a quick calculation at the advertised rate would suggest. Our affordability calculator builds this in.

Which income the bank counts

For salaried borrowers, banks take basic salary plus fixed allowances such as housing and transport. Commission and bonuses usually count only if you can show a history of them, and many banks average them over recent months or count only part.

Spouses can apply jointly and combine incomes at most banks. A few banks also accept other close family members as co-borrowers.

Minimum income

Each bank sets its own minimum. Most look for about AED 15,000 a month. A few accept AED 10,000 to 12,000 for some products, usually with a smaller choice of lenders.

Self-employed applicants are assessed on the business income shown in audited accounts, and most banks want the company trading for at least 2 years before they will look at it.

At the lower end of the range, the 50% rule usually limits you before the minimum does. On AED 12,000 a month, the ceiling for all debt payments is AED 6,000, and a single car loan can take a large part of that.

Loan term and age limits

The longest mortgage term in the UAE is 25 years. The loan also has to be repaid by age 65 for expats and 70 for UAE nationals. Some banks let self-employed expats run the loan to 70, which we check case by case.

The two limits work together. A 38-year-old expat can take the full 25 years and finish at 63. A 46-year-old can take 19 years at most.

A shorter term means a higher monthly payment on the same loan, and a higher payment uses up more of your 50% DBR. For buyers in their late forties and fifties, the age limit often sets the budget more than the deposit does. A joint application with a younger spouse can sometimes help, depending on how the bank treats age on joint loans.

Fees and early repayment

The Central Bank caps what a bank can charge when you pay off a mortgage early. The early settlement fee is 1% of the outstanding balance or AED 10,000, whichever is lower. On a balance of AED 700,000 the fee is AED 7,000. On AED 1,300,000, 1% would be AED 13,000, so the AED 10,000 cap applies.

Banks can also charge an arrangement or processing fee of up to 1% of the loan plus VAT when you take the mortgage out. Some waive it, sometimes with conditions such as a minimum loan size. We compare the total cost over the fixed period rather than the headline rate on its own.

Islamic home finance follows the same limits

Islamic home finance sits under the same caps. Ijara (lease to own) is the most common structure, and Murabaha and diminishing Musharaka are also used. You pay a profit rate instead of interest, but the LTV, DBR, term and age rules above apply in the same way. Our page on Islamic mortgages explains how each structure works.

What the bank checks before it says yes

Once the numbers work, the bank looks at you. It pulls your report from the Al Etihad Credit Bureau (AECB), where scores run from 300 to 900. Late payments and bounced cheques count against you, and so do cards that sit close to their limit.

Banks also look at your employer. Most keep lists of approved companies, and the category your employer falls into can affect the rate and how much of your income they accept. Some banks will not lend while you are still on probation.

Pre-approval usually takes 3 to 7 working days once your documents are complete, and it is typically valid for 60 to 90 days. After you agree a price, the bank values the property and issues the final offer letter, and the transfer happens at a trustee office. Our mortgage documents checklist lists what to gather.

To see where you stand on the 50% rule with your own numbers, use the affordability calculator. If you would rather we check, send your salary and existing debts on WhatsApp to +971 52 871 6915 and we will tell you which banks fit.