Home loan with profit rates starting at 2.75% per year
Home loan with profit rates starting at 2.75% per year
Best Mortgage Loans to buy your dream home
A mortgage loan is a kind of secured loan, which is offered by banks or other financial institutions against the borrowers’ residential or commercial property. The borrowers can use the amount collected by keeping the property in the form of collateral until the repayment of the loan for different purposes such as the expansion of business, payment of medical expenses, funding their kids’ education, and much more.
Over the years, UAE has gained popularity as a destination for the expatriates, especially in Abu Dhabi and Dubai (as these Emirates are business-friendly). To align with such a trend, the UAE mortgage market has grown to become well-established, with the local and international lenders providing the expats with home loans.
Both buy to let mortgage, as well as a residential mortgage, is being offered to the expats in the UAE. The loan criteria, however, may differ from lender to lender and borrower to borrower.
Here is a quick rundown on the features & benefits of mortgage loans to see what makes them so popular amongst the UAE residents.
In the UAE, one can get a mortgage on a variable rate or a fixed rate basis. The fixed terms are around usually around 5 years and can be as low as one year. When the fixed term ends, the deal is moved on to the variable rate of the bank.
A fixed-rate mortgage lets the borrowers have a surety about the repayment size for a particular amount of time. However, taking a variable deal in consideration would be a good idea in case the rate of interest seems to decline. The tenure of the loan is usually 25 years and the repayment will have to be done before turning 70 years old.
The table below shows the rates of interest of mortgage loans in the UAE.
Bank Name | Mortgage | Flat Rate | Reducing Rate |
---|---|---|---|
FAB |
Islamic Mortgage Loan |
Profit Rate-2.75% |
Profit Rate-3.50% |
FAB |
Mortgage Loan |
2.75% |
3.50% |
FAB |
Mortgage Loan for Small Buildings |
6.75% |
- |
Emirates NBD |
Home Loans for UAE Nationals |
3.04% |
5.75% |
Emirates NBD |
Home Loans for Expats |
3.04% |
5.75% |
Emirates Islamic Bank |
Home Finance – Bina’a for UAE Nationals |
1.75% |
3.49% |
Emirates Islamic Bank |
Home Finance – Manzili |
1.92% |
3.49% |
ADIB |
Home Loans for UAE Nationals |
Profit Rate-2.06% |
Profit Rate-3.75% |
ADIB |
Home Loans for Expats |
Profit Rate-2.06% |
Profit Rate-3.75% |
CBD |
Mortgage Loan for Salaried |
Profit Rate-2.18% |
Profit Rate-3.54% |
CBD |
Mortgage Loan for Self-Employed |
Profit Rate-2.18% |
Profit Rate-3.54% |
RAKBANK |
Home In One |
1.83% |
3.49% |
RAKBANK |
Mortgage Home Loan |
2.09% |
3.99% |
Mashreq Bank |
Home Loan |
2.99% |
- |
Standard Chartered Bank |
MortgageOne |
1.95% |
3.53% |
HSBC |
New Home Loan |
1.96% |
3.59% |
HSBC |
Fixed Interest Rate Home Loan |
3.59% |
- |
The residents can obtain a mortgage in the UAE; however, they will have to meet an eligibility criterion.
While applying for a mortgage, the required documents may differ depending upon the bank. The lenders may ask you to present the following documents.
The following are the major steps to obtain a mortgage.
Whether purchasing a new property or refinancing the existing home loan, looking for a suitable mortgage in the UAE can get confusing at some point in time. The wide range of options available from both international as well as local lenders adds more validation to the previous statement.
The cost of purchasing a property in the UAE can add up quickly, hence, it is important for the applicants to do detailed research for making sure that they can afford the charges and monthly payments.
Using a mortgage calculator will help them in finding out exactly what the monthly payments would be along with the fees they will have to bear while purchasing a property in the UAE.
In order to make all the calculations, the applicants have to enter the home price, down payment amount, rate of interest, and loan tenure in the calculator. The result shown will be the amount that the applicant will have to pay every month.
Repayment mortgages are amongst the major kinds of home loans in the UAE. They involve the payment of a set amount every month for the duration of the loan tenure. Generally, the payment will be done by setting the direct debit facility from the bank account of the borrowers on a particular date every month.
The interest-only mortgage is not very common. They involve the payment of only a part of interest every month, and then the payment of the entire principal amount when the term ends. Since the loans are risky, they are usually available only with 5-year tenures.
The flat rate is the interest rate where the amount to be paid remains the same for the entire tenure of the loan because it is always calculated on the principal. The flat rate is the interest rate where the amount to be paid considers the repayments, hence it is calculated against the outstanding or remaining balance of the loan.
It is a kind of guarantee that each bank in the UAE needs while providing any kind of credit facility including mortgages, car or personal loans, or credit cards. You will have to make payment of an undated cheque that covers the entire credit amount as the minimum.
ERC refers to a penalty that is charged on the borrowers who wish to make early settlement of the loan amount. The ERC may differ based on the rate of interest on the loan- if it is fixed or variable.
LTV is the relationship between the value of the property and the borrowed amount.
This is dependent upon the bank from which you have obtained the home loan. Usually, the banks have a maximum allowance of 50% of the remaining balance when you take the mortgage loan. In case you are on a fixed mortgage, in a few situations, the bank will let you make over-payments after the end of the fixed-rate period.