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Guide to Mortgage Interest Rates in the UAE: A 2024



As of 2024, the mortgage landscape in the United Arab Emirates (UAE) continues to evolve, offering prospective homeowners a variety of financing options tailored to diverse needs. Understanding the nuances of mortgage interest rates, loan types, and associated fees is crucial for making informed decisions.

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Current Mortgage Interest Rates in the UAE


Mortgage interest rates in the UAE are influenced by several factors, including the Central Bank's base rate, economic conditions, and individual borrower profiles. As of 2024, the average mortgage rates are:


  • Fixed-Rate Mortgages: Ranging from 3.99% to 5.49% per annum for terms between 1 to 5 years.

  • Variable-Rate Mortgages: Starting at approximately 3.5%, typically linked to the Emirates Interbank Offered Rate (EIBOR) plus a lender's margin.

  • Islamic Home Financing: Rates generally fall between 4% and 6%, adhering to Sharia-compliant structures.


These rates can fluctuate based on market conditions and individual bank offerings.



Types of Mortgage Loans Available


Prospective borrowers in the UAE can choose from various mortgage structures:


  1. Fixed-Rate Mortgages: Offer a consistent interest rate over a predetermined period, providing stability in monthly repayments.

  2. Variable-Rate Mortgages: Interest rates fluctuate based on EIBOR, leading to potential variations in monthly payments.

  3. Islamic Home Financing: Includes structures like Ijara (lease-to-own), Musharakah (joint ownership), and Murabaha (cost-plus financing), aligning with Islamic banking principles.



Mortgage Interest Rates from Leading Banks (Loan Amount: AED 1 Million)


Several banks in the UAE offer mortgage options for a loan amount of AED 1 million. Here are some examples:


  1. RAKBANK - Home In One

    • Interest Rate: Starting at 4.03% p.a. (reducing rate), fixed for 5 years.

    • Features: Zero in-principle approval fees, easy access to funds.

  2. Standard Chartered - Saadiq Home Finance

    • Interest Rates: From 4.12% to 4.98% (varies based on EIBOR).

    • Features: No valuation or processing fees, up to 25-year repayment tenure.

  3. Emirates NBD Home Loans

    • Interest Rate: Starting at 7.15% p.a. (reducing rate).

    • Features: Finance up to 85% of property value, complimentary insurance.

  4. Emirates Islamic - Home Finance Manzili

    • Profit Rate: EIBOR + Margin (1.74% to 4.25% p.a.).

    • Features: Flexible repayment up to 25 years.

  5. ADCB - Standard Mortgage Loan

    • Interest Rate: Starting from 4.5% p.a.

    • Features: Hybrid (fixed-variable) and variable options, financing up to 85%.

  6. Sharjah Islamic Bank - Real Estate Finance

    • Interest Rate: From 4.25% p.a. (reducing rate).

    • Features: Multiple fixed-rate options (1, 3, 5 years), flexible tenure up to 25 years.

  7. HSBC Home Loan

    • Interest Rate: From 5.10% p.a. (reducing rate).

    • Features: No early settlement fees after 3 years.

  8. United Arab Bank (UAB) Home Loan

    • Interest Rate: From 3.89% p.a.

    • Features: Financing up to 85% (UAE Nationals), 80% (Expats).



Fees and Charges Associated with Mortgages


Beyond interest rates, borrowers should be aware of additional costs:

  • Processing Fees: Typically 0.5% to 1% of the loan amount.

  • Property Valuation Fees: AED 2,500 to AED 3,500.

  • Early Settlement Fees: Around 1% of the outstanding loan amount.

  • Late Payment Fees: Vary by bank; for instance, FAB charges between AED 52.50 and AED 210.

  • Insurance Costs: Life and property insurance are often mandatory.


Recent Developments Impacting Mortgage Rates


In December 2024, the Central Bank of the UAE reduced its overnight deposit facility rate to 4.4%, aligning with a 25 basis point rate cut by the US Federal Reserve. This move aims to lower borrowing costs, potentially making mortgages more affordable for consumers.



Tips for Securing the Best Mortgage Rates


To obtain favorable mortgage terms:

  1. Enhance Creditworthiness: Maintain a strong credit score.

  2. Compare Offers: Evaluate mortgage products from multiple banks.

  3. Negotiate Terms: Engage in discussions with lenders.

  4. Consider Loan Tenure: Balance manageable monthly payments with interest costs.

  5. Seek Professional Advice: Consult mortgage advisors for guidance.

By staying informed about current rates, understanding mortgage products, and being aware of associated costs, prospective homeowners in the UAE can make well-informed decisions that align with their financial goals.



Source from ;

  • Central Bank of the UAE – For regulatory updates and benchmark interest rates.

  • Individual Bank Websites – Such as Emirates NBD, RAKBANK, Standard Chartered, ADCB, HSBC, Emirates Islamic, Sharjah Islamic Bank, United Arab Bank, and CBI.

  • Financial Comparison Platforms – Examples include Paisabazaar.ae, Yallacompare, Souqalmal, and Bayut.

  • News Reports & Financial Publications – Such as Gulf News, Khaleej Times, and The National.

  • EIBOR (Emirates Interbank Offered Rate) Data – Available through the UAE Central Bank.


Disclaimer;

"The mortgage rates and terms mentioned in this article are sourced from publicly available data from banks, financial comparison websites, and UAE regulatory bodies as of 2024. Prospective borrowers should check directly with banks for the latest rates and terms."



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