Mortgage Rates UAE

Mortgage Interest Rates UAE

Mortgage interest rates have an effect on your repayment rate and loan cost. With Prime Rate Hub, buyers can compare mortgage interest rates of more than 25 banks in the UAE and learn about the differences between fixed and variable mortgage interest rates.

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What Are Mortgage Interest Rates in UAE?

The mortgage interest rates in the UAE refer to the interest or profit that is charged by banks on loans extended to finance real estate purchases and refinances.

Fixed rates for an initial period

Variable rates linked to EIBOR + bank margin

Promotional rates for selected borrower profiles

How Mortgage Interest Rates Work in UAE?

The mortgage interest rates in the UAE are usually provided in the form of fixed or variable. Fixed mortgage interest rates provide for keeping the interest rates at the same level for a certain period, usually from one to five years, while variable mortgage interest rates change in accordance with various market benchmarks like EIBOR. When the fixed period expires, most of the mortgage interest rate products will be changed to a variable type.

In the case of fixed-interest rate mortgages, the interest remains constant for 1-5 years. Variable-interest rate mortgages are calculated using EIBOR along with the mark-up provided by the lender, which means that the payments can go up or down according to the market conditions. The mortgages tend to become variable after the fixed interest rate period elapses.

Fixed-rate mortgages keep the interest rate unchanged for 1–5 years, providing stable monthly repayments.

Variable-rate mortgages are commonly based on EIBOR plus the lender’s margin, so repayments may rise or fall with market conditions.

Most mortgages move to a variable interest rate automatically after the fixed-rate period expires.

What Affects Mortgage Rates

Mortgage rates offered by banks depend on several factors:

Income level and employment profile

Credit history and liabilities

Loan amount and property value

Debt Burden Ratio (maximum 50%)

Property type and location

Overall bank risk assessment

Two borrowers applying to the same bank may receive different offers.

Fixed vs Variable Mortgage Rates

Fixed Rate
Stable monthly payment

Variable Rate
Can benefit from falling rates

Fixed Rate

Lower uncertainty

Variable Rate

Often cheaper initially

Fixed Rate

Better for risk-averse buyers

Variable Rate

Higher exposure to rate increases

The Rate Alone Is Not the Whole Story

Two clients approaching the same bank might have two different mortgage offers made to them.

Interest rate following the fixed period

Cost of life insurance

Cost of property insurance

Cost of processing and valuation

Refinancing capabilityRefinancing flexibility

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FAQ

Mortgage Rates

What is the mortgage rate in UAE at present?

UAE banks offer both fixed and variable mortgage rates for their customers depending upon their profiles and other factors.

What does EIBOR stand for?

EIBOR stands for Emirates Interbank Offered Rate.

Are mortgage rates in UAE fixed or variable?

Both fixed and variable mortgage rates exist in the UAE.

How often do mortgage interest rates change?

Variable interest rates will change when EIBOR changes.

What bank has the best mortgage interest rate?

It depends on the borrower’s qualifications and what is being offered in the market.

Can one change their mortgage interest rate to a better one?

Yes. This could be done through refinancing or a mortgage buyout.

Which is better between fixed and variable interest rates?

Fixed rates offer stability, while variable rates may offer savings when market rates fall.