Home Loan

In the United Arab Emirates (UAE), or rather any part of the world, owning a home that you can truly call ‘yours’ is a top goal. However, due to the high cost of property and other financial commitments, most people brush this dream off their minds. With home loans or mortgage loans, however, there’s an easy option to help you fulfil your goal. 

Mortgage loans or home loans are designed to bring you that flexibility in your budget that you always crave. This means you can now own the house of your dreams without breaking the bank.

In the UAE, home loans are typically offered by banks and other financial institutions and are regulated by the UAE Central Bank to ensure fair play and transparency with the customers. The terms and conditions of mortgage loans, including interest rates, down payment requirements, repayment periods, and more vary depending on the lender and the individuals financial situation.

All in all, owning a home in the UAE can be a rewarding investment with a home loan. However, it is crucial to carefully consider all the costs and requirements associated with obtaining a mortgage loan and purchasing a property. Heres where we'll help you know it all.

What is a Home Loan?

A home loan is a type of loan that is provided by banks or financial institutions to individuals to help them purchase a home or residential property. Home loans in the UAE typically have a fixed or variable interest rate, and the borrower is required to make regular monthly payments towards the loan until it is fully repaid. The loan amount, interest rate, and repayment period can vary depending on the borrowers financial circumstances and the lenders terms and conditions.

A home loan can be a useful tool for individuals and families who want to purchase a property but don't have the necessary funds to do so outright from their own savings.

What is a Mortgage Loan?

Mortgage loans are similar to home loans albeit with a key difference in the form of collateral. In a home loan, the property for which you are getting the loan itself serves as collateral. With mortgage loans, however, you may have to present another existing property as collateral. In case you, as the borrower, fail to repay the loan, the lender has the right to seize the property and sell it to recover the outstanding debt.

While different in name and general definition, home and mortgage loans are mostly used interchangeably in the UAE with slight changes in terms and conditions.

Types of Home Loans & Mortgage Loans in UAE

Here is a general categorisation of the types of home loans in the UAE - 

1. Fixed-Rate Home Loan: A fixed-rate home loan is a type of loan where the interest rate remains the same throughout the loan tenure. This type of loan provides stability and predictability in terms of monthly payments and is suitable for those who want to plan their finances in advance.
2. Variable-Rate Home Loan: A variable-rate home loan is a type of loan where the interest rate is subject to change during the loan tenure based on market conditions. This type of loan provides flexibility in terms of interest rates, which can either go up or down, depending on the market conditions.
3. Islamic Home Financing: Islamic home financing, also known as Sharia-compliant home financing, is a type of financing that is based on the principles of Islamic finance. It is a type of home financing that is free from interest (riba) and is structured as a partnership between the bank and the borrower.

Not all types of loans are available with every bank in the UAE. It is recommended to check with the bank or financial institution for their specific types of home loans and mortgage loans. You can compare different products from the top banks in the UAE on Policybazaar.ae to make an informed decision.

List of Best Home & Mortgage Loan Plans with Interest Rates & Tenure Range in Dubai, UAE

Lets take a look at some of the best home loans or mortgage loans in UAE and check out their interest rates as well as the repayment tenures -

Click here to Apply for Home Loan in UAE

Best Mortgage Loans in UAE

Several banks in the UAE offer multiple types of of mortgage and home loan products. Below listed are some of the top banks offering some highly preferred home loan products in the UAE. Listed along are the various products and services available as well as some key benefits:

First Abu Dhabi Bank Home Loan

FAB or First Abu Dhabi Bank of the UAE provides four different types of home financing products which are listed as follows:

1. Home Loan for Investment and Residents 
   • Reducing interest rate from 0.49% - variable EIBOR in the first year
   • 1% early settlement fee for a maximum of AED 10,000
   • 1% procession fee
   • Minimum Salary: AED 15,000 for salaried and AED 25,000 for self-employed
   • Maximum Loan Amount: AED 20,000,000 (15% down payment)
   • Tenure: Up to 25 years
2. Home Loan for Non-Residents
   • Reducing interest rate from 3.24% - fixed for the first two years
   • 1% early settlement fee for a maximum of AED 10,000
   • 1% processing fee
   • Minimum income: AED 50,000 for all applicants
   • Maximum loan amount: AED 10,000,000 with 50% down payment
   • Tenure: Up to 25 years

RAKBANK Mortgage Loan

Home and mortgage loan products offered by RAKBANK include Mortage Home Loan and Home in One. Below given are a few details about Mortage Home Loans offered by the bank:

• Flat Rate: 2.09%, Reducing Rate: 3.99%
• 1% early settlement fee 
• 1% processing fee
• Minimum Salary: AED 15,000
• Maximum Loan Amount: AED 18,000,000 with 20% down payment
• Tenure: Up to 25 years

Standard Chartered Bank Mortgage Loan

Saadiq Home Finance and MortgageOne are the two types of home loan products you will find with Standard Chartered Bank. Below given a some key details of the same:

1. Saadiq Home Finance
   • Flat Rate: 1.66%, Reducing Rate: 2.99%
   • 1.05% early settlement fee on the loan amount (maximum AED 10,050)
   • 0.2625% processing fee with blanket property evaluation and NIL balance transfer
   • Minimum Salary: AED 15,000
   • Maximum Loan Amount: AED 18,000,000 (20% down payment)
   • Maximum Tenure: 25 years
2. MortagageOne
   • Flat Rate: 1.89%, Reducing Rate: 3.40%
   • 1.05% early settlement fee (calculated on loan amount) - maximum AED 10,050
   • 0.525% processing fee with blanket property evaluation and NIL balance transfer
   • Minimum Salary: AED 15,000
   • Maximum Loan Amount: AED 18,000,000 with 20% down payment
   • Tenure: Up to 25 years

Emirates NBD Bank Mortgage Loan

Emirates NBD Bank offer two separates home loan products - one for UAE nationals and another for UAE ex-pats. Following are some key details of both these products:

1. Home Loans for UAE Nationals
   • Flat Rate: 3.04%, Reducing Rate: 5.75%
   • 1% early settlement fee 
   • 1% processing fee
   • Minimum Salary: AED 10,000
   • Maximum Loan Amount: AED 5,000,000 (20% down payment)
   • Maximum Tenure: 25 years
2. Home Loans for UAE Ex-Pats 
   • Flat Rate: 3.04%, Reducing Rate: 5.75%
   • 1% early settlement fee 
   • 1% processing fee
   • Minimum Salary: AED 20,000
   • Maximum Loan Amount: AED 3,000,000 with 25% down payment
   • Maximum Tenure: 25 years

Emirates Islamic Bank Mortgage Loan

Emirates Islamic is one of the many banks offering great islamic home loan options. Home Finance Bina’a for UAE Nationals and Home Finance Manzili are the two islamic mortgage option available here. Below listed are key details of both these options:

1. Home Finance Bina’a for UAE Nationals 
   • Flat Rate: 1.75%, Reducing Rate: 3.49%
   • 1% early settlement fee 
   • 1% processing fee
   • Minimum Salary: AED 15,000
   • Maximum Loan Amount: AED 15,000,000 (20% down payment)
   • Tenure: Up to 25 years
2. Home Finance Manzili
   • Flat Rate: 1.92%, Reducing Rate: 3.49%
   • 1% early settlement fee 
   • 1% processing fee
   • Minimum Salary: AED 15,000
   • Maximum Loan Amount: AED 15,000,000 with 25% down payment
   • Tenure: Up to 25 years

Home Loan and Mortgage Loan Calculator UAE

A home loan and mortgage loan calculator in UAE is a financial tool that helps borrowers calculate their monthly loan repayments based on their loan amount, interest rate, and repayment tenure. This calculator can be used to determine the total interest paid over the entire loan period, the total amount of repayment, the monthly instalment amount, and more.

Using a home loan or mortgage calculator is a straightforward process. You can use the home loan calculator on Policybazaar.ae to plan out an effective repayment strategy for your loan from any of the leading financial institutions in the UAE. Here are the steps to be followed for the same - 

• Step1- Visit Policybazaar.ae.
• Step2- Scroll down to the bottom and click on the option for ‘financial calculators’. 
• Step3- This will take you to a page with different calculators such as car insurance calculator, health insurance calculator, and more. Choose the ‘home loan calculator’ and proceed. 
• Step4- Add the details about the loan amount and tenure that suits your needs.
• Step5- You’ll be shown the total interest, monthly instalment, and the total payable amount at the bottom. You will also see the ‘View Plans’ option to check out the best matching plans from some of the leading banks in the UAE.
• Step6- Click ‘View Plans’ to get to our home loan quotes page.

You can also make adjustments to the loan tenure, interest rate, and amount to check how it affects the repayment amount.

Using a home loan or mortgage loan calculator can help you check the affordability of a loan and plan your finances accordingly. It is recommended to use this tool before applying for a loan to have a better understanding of the monthly repayment amount and total interest paid over the loan period.

Benefits of Using a Home Loan Calculator in Dubai, UAE

With a home loan calculator, you can enjoy several benefits such as the following - 

1. Helps plan finances: A home loan calculator can help you plan your finances by giving you a clear idea of your monthly loan repayment amount. This allows you to budget and plan your finances accordingly, ensuring that you can fit in the monthly payments in your budget.
2. Saves time: You can save considerable time by using a home loan calculator, as it gives you an instant estimate of your monthly loan repayment amount. You won’t need to manually calculate the repayment amount, which can be time-consuming and tedious.
3. Helps compare loan offers: With a home loan calculator, you can compare loan offers from different banks and financial institutions. You can easily compare the monthly repayment amount, interest rates, and other loan terms to find the best loan offer.
4. Provides accurate estimates: These calculators provide accurate estimates of the monthly repayment amount and the total interest paid over the loan period. With this information, you can make an informed decision about the loan amount and tenure.
5. Assists in selecting the loan tenure: Another benefit of home loan calculators is that they can help you plan the loan tenure by showing you the total interest paid over the loan period. You can then easily adjust the loan tenure to see how it affects the monthly repayment amount and total interest paid and choose the most suitable one as per your requirements.

Eligibility Criteria for Home & Mortgage Loan in UAE

Home loans in the UAE are available to both UAE nationals and expats who meet certain eligibility criteria set by banks and financial institutions. Although these criteria vary among banks and lending institutions, the general eligibility requirements include the following - 

Eligibility Criteria	Details
Nationality	UAE Nationals and Expats
Age	21-65 years
Minimum Salary	AED 10,000 to AED 15,000 per month
Employment Type	Salaried and self-employed individuals
Work Experience	6 months to 1 year
credit score	A good credit score is required
Property Type	Completed and off-plan properties
Loan Amount	Up to 85% of the property value
Repayment Tenure	Up to 25 years

Note: As mentioned earlier, the eligibility criteria are different for each bank and financial institution in the UAE. The above table provides a general overview of the eligibility criteria for home and mortgage loans in the region. It is recommended to check with the bank or financial institution for their specific eligibility criteria before applying for a loan.

Documents Required for Home Loans and Mortgage Loans in UAE

Listed below are the documents generally required for home loans in UAE -

• Completed application form
• Passport copy
• Emirates ID
• Visa Copy (for expats)
• Salary Certificate
• 3 or 6 months’ bank statements
• Credit report
• Property documents
• Sale/purchase agreement
• Title deed
• Valuation report

Important: The documents required for home loans and mortgage loans may vary between banks and financial institutions in the UAE. The above table provides a general overview of the documents required for the mentioned loans in the region. It is recommended to check with the bank or financial institution for their specific documentation requirements before applying for a loan.

Fees and Charges for Home Loans & Mortgage Loans  

Check out the table below for the general schedule of fees and charges applicable to home loans in the UAE - 

Fees and Charges	Home Loan
Processing Fees	1% of the loan amount
Valuation Fees	Around AED 3,150
Early Settlement Fees	1% of the outstanding loan amount  or AED 10,000 (whichever is lower)
Late Payment Fees	2% to 4% of the overdue amount
Insurance Fees	Varies based on the type and coverage of insurance

Keep in mind that the actual schedule of fees and charges varies as per the bank.

How to Apply Online for a Home Loan via Policybazaar UAE?

Policybazaar.ae provides access to a wide range of home loan options from different banks and financial institutions in the UAE. This allows you to find the top options in one place and compare them to choose the one that best suits your requirements.

Another key aspect here is that the teams of experts and customer service personnel of Policybazaar.ae are always available to assist you throughout the application process. By connecting with them, you can get guidance related to the different Home Loan options, documentation, and any other queries that you may have.

Heres how you can easily apply for a home loan through Policybazaar.ae - 

• Step1- Visit policybazaar.ae, the official website of Policybazaar UAE.
• Step2- Click on the Banking Products then choose the Home Loan option.
• Step3- Enter the specified details in the lead form such as your name, monthly income, and more. Once done. click on View Quotes.
• Step4- You will find all the relevant home loan quotes from the top banks and providers in the UAE displayed on your screen.
• Step5- Go through the plans and compare them as per their features, interest or profit rates, and so forth.
• Step6- After deciding on a plan, choose the option for applying for it and proceed with the application process.

Click here to Apply for Home Loan & Mortgage Loan in UAE

Quick Tips to Avail the Right Home Loan in UAE

Home loans are certainly helpful in buying a home. Yet, with the high loan amounts and tenures involved, it becomes crucial to manage these loans properly. Here are some practical tips to help you get the right home loan or mortgage loan plan for yourself - 

• Assess your financial position: Before applying for a home loan, it is important to assess your financial position and look at factors such as your income, expenses, credit score, and debt-to-income ratio. This will give you a clear idea of your affordability and help you determine the loan amount that you can apply for.
• Research different home loan options: It is important to research different home loan and mortgage loan options in the UAE. This includes the interest rates, loan tenures, processing fees, and other charges associated with the loan.
• Compare offers from different banks/financial institutions: Once you have shortlisted a few home loan/mortgage loan options, thoroughly compare them in terms of their interest rates, fees, and other charges. This will help you choose the one that offers the best deal.

Note: If you are new to the loan process, it is advisable to seek the advice of a financial advisor before applying for a home loan/mortgage loan in UAE.

Steps to Compare Home Loans in UAE

Policybazaar.ae is the best platform to compare home loans online as per various parameters from the comfort of your home. Here are some general points that you can keep in mind to make your search with Policybazaar.ae seamless and more specific - 

• Step1- Identify your requirements: Before you start comparing mortgage loans, identify your requirements, such as the loan amount, tenure, interest rate, and other features you may be looking for.
• Step2- Research different home loan options: Research different home loan options available in the UAE. This can be done by visiting the websites of different banks and financial institutions or by using third-party platforms such as Policybazaar UAE.
• Step3- Shortlist home loan options: Once you have a list of the top home loan options, shortlist the ones that meet your requirements.
• Step4- Compare interest rates: The interest rate is one of the most important factors to consider while comparing home loans. Compare the interest rates offered by different banks and financial institutions and choose the one that offers the lowest rate.
• Step5- Compare other fees and charges: Apart from the interest rate, several other fees and charges are associated with home loans such as processing fees, prepayment charges, foreclosure charges, and more. Compare these charges across different home loan options and choose the one that suits your repayment plans and more.
• Step6- Check eligibility criteria: Each bank and financial institution has different eligibility criteria for home loans. Make sure to check the criteria for each option - salary, age, nationality, and more - and only apply for one that you are eligible for.

In case you are stuck somewhere or want to know more before proceeding, you can connect with Policybazaar.ae’s 24x7 available customer service team.

Understanding Home Loan Rejection

Home loan rejection can certainly be a frustrating experience. However, there is no need to lose hope. You can always improve your chances of securing a home loan by taking a few simple steps in the right direction. 

Here are some common reasons why such rejections may take place - 

1. Poor credit score: A low credit score is one of the most common reasons for home loan rejection in the UAE. This is due to the fact that home loans involve high loan amounts, which translates into a higher risk for the provider. As a result, banks and financial institutions generally require a credit score of 700 or above to approve home loans to ensure the creditworthiness of the applicant. 
2. Low income: Banks and financial institutions in the UAE have minimum income requirements for home loans. If your income is below the required limit, your application can be rejected straightaway.
3. High debt-to-income ratio: Your debt-to-income ratio is the percentage of your monthly debt obligations against your income. If your debt-to-income ratio is on the higher side, your home loan application can be rejected.
4. Employment status: Banks and financial institutions in the UAE prefer applicants who have a stable employment history. So if you have frequent job changes or gaps in employment, your home loan application may be rejected.
5. Incomplete documentation: If you have not submitted all the required documents with your application or if the documents are not in order, you can face rejection.

If your home loan application is rejected, you can contact the bank or financial institution to understand the reasons for rejection and take steps to improve your eligibility. Alternatively, you can consider applying for such a Loan with another bank or financial institution after addressing the issues that led to rejection.

What to Do If Your Home & Mortgage Loan Application is Rejected in UAE?

If your home loan or mortgage loan application is rejected in the UAE, you can follow a few steps like the following - 

• Find out the reason for rejection: Several banks may tell more about the reasons for which they rejected your application. Thus, before proceeding with other steps in this list, make sure to connect with the concerned bank or loan provider to see if you can find out more about the reasons for rejection. This can help you identify the specific issues that led to the rejection and take steps to address them.
• Improve your credit score: If your credit score was the reason for the rejection, you should certainly work on improving your credit score. This can be done by paying your bills on time, maintaining a proper credit utilisation ratio, checking your credit report for errors, and more.
• Reduce your debt-to-income ratio: If your debt-to-income ratio was the reason for rejection, work on reducing your debt against your income. You can consider paying off some of your existing debt or increasing your income to improve your debt-to-income ratio.

It’s worth noting that multiple rejections of loan applications can bring down your credit score. Thus, after a rejection, you should take steps to improve your credit score, income, and other aspects and wait for a while before applying again.

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