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What Kind of Mortgages Can You Take in Dubai as an Off-plan Buyer?


A mortgage loan is taken from a bank or financial institution, to raise funds to buy real estate.

What you should keep in mind while taking a Mortgage for an Off-plan/Ready Property?

  • You have to finance 50% of the off-plan property value using your funds. If you approach a bank, you can lend up to 50% against the value of the off-plan property.
  • This percentage is known as the loan to value ratio. It means that if the property being purchased is say, AED 1,000,000, the maximum amount the bank will lend against that property is AED 500,000 or 50% for an off-plan purchase and the percentage will be 75% for a ready property.
  • This applies to both UAE nationals as well as expats.
  • Banks offer applicants who are non-residents with mortgages with an interest rate of about 4.50%. It is a fixed interest rate, calculated using a 3-month EIBOR rate.
  • If more than one application for a mortgage is submitted for the same property at the same time, creditors will be classified and mortgages will be given according to the individual’s credit score.
  • When you register with the Dubai Land Department (DLD), the DLD will issue a written or electronic mortgage document and the mortgage will be enforceable against third parties.

Other points to consider:

  • When purchasing a property in the UAE, additional costs associated with a real estate transaction must also be taken into account, such as the cost of an appraisal of the property, the real estate commission, the transfer of land and the registration fee for the mortgage.
  • In Dubai, the buyer and seller must meet with the Dubai Department of the Land or fiduciary of the property to register the transfer of title.
  • There are several different protocols, depending on whether you are buying a property from a developer, called an "off-plan" purchase, or whether you are buying a property from a private seller called a "resale" purchase.
  • If you are buying from a secondary market, it is highly recommended to consult a licensed real estate agent for each real estate transaction.

Which Banks Will Finance an Off-plan Property Purchase?

Banks who offer to finance for an off-plan property are selective of the off-plan projects they would be financing. They only approve mortgage loans for properties that belong to master developers like Emaar Properties, Meraas and Dubai Properties. Occasionally they approve loans for projects belonging to certain other developers too.

The Process for Buying Ready Property

  • The process of purchasing property on the secondary market has become more streamlined in recent years, with various procedures implemented by the Dubai Land Department (DLD), as well as the introduction of Registration Trustee (RT) offices.
  • The process will differ depending on whether the buyer is purchasing with cash or a mortgage, and if the property has a mortgage against it.
  • If you buy real estate from a secondary market, the lender must perform a technical evaluation first.
  • In most cases, whether it is a developer or a real estate agent, two to five percent of the selling price is expected to be paid in addition to the price of the property.
  • To purchase real estate in Dubai, the buyer must be over 21 years old.

The Process for Buying off-plan Property

  • The buyer has to finance 50 percent of the off-plan purchase.
  • The developer will ask you to sign a Sale Purchase Agreement and pay the deposit.
  • When the off-plan project is ready, the buyer has to pay the rest of the 50 percent. The payments will depend on the payment plan mentioned in the contract.
  • Depending on the developer’s offer, you may have to pay the registration fee fully.
  • This will amount up to 4% of the purchase price.

The Process for Cash Buyer and Mortgage- free Property

  • Once a buyer decides to purchase a property, the buyer and seller negotiate the terms and sign the property sales contract, also known as Form F, which is required by the Dubai Land Department.
  • The buyer hands over a deposit cheque in the name of the seller.
  • The deposit will be 10 percent of the purchase price.
  • This deposit is to be held by the seller’s broker or a neutral third party if no broker is involved. The cheque is returned to the buyer at transfer and is only cashed if the buyer defaults on the agreement.

Cash Buyer and Mortgaged Property

When there is an existing mortgage on the property, the loan must be settled before transfer to the buyer. To do so, the seller must first request a liability letter from the lender (bank). This letter states the balance of the loan, as well as any fees and penalties. The liability letter generally has a validity period ranging from 7-15 days, depending on the bank. Therefore, it is important to time the request for the letter so that it does not expire before the transfer date, otherwise, a new letter must be requested.

If the seller does not have the funds to settle the mortgage, then the buyer must do it. Since a cash buyer needs protection against the seller transferring property to another person or changing the terms of the agreement after the buyer pays off the seller’s loan, it is important to “block” the property. Once the liability letter is received, the parties must go to the RT office to block it.

After the property is blocked, the seller delivers the cheque to the lender, although some banks require the buyer to be present as well. After the mortgage is settled, the clearance letter and original title deed are provided to the seller.

The NOC process then takes place. When received, the parties proceed to the RT office to transfer the property. The cheques are disbursed and the buyer takes the original title deed.

Mortgage Buyer and Mortgage-Free Property

If a buyer needs financing, a pre-approval letter should be obtained to determine the maximum amount the bank is willing to lend the buyer. The benefit of pre-approval is twofold: buyers and brokers can set a price range when searching for a property, and sellers will take the offer more seriously. To receive the pre-approval letter, salary certificates and bank statements are required by the lender. The pre-approval letter has an expiration date, so time is of the essence for the buyer to find a property and negotiate an agreement.

Once the parties have signed the contract and the deposit is handed over, the lender will conduct a valuation or appraisal of the property’s value. The valuation fee generally ranges from Dh2,500 –Dh3,500 and is paid by the buyer.

If the property is valued for at least the purchase price, the bank issues the final offer letter (FOL) to the buyer. The FOL includes all the terms and conditions of the loan and mortgage. The buyer arranges with the lender to sign the FOL and issues security cheques to the bank, as required.

The parties then apply for the NOC. Once it is obtained, the lender schedules the transfer at its preferred RT office. The buyer must bring the following manager’s cheques:

  • Contribution of at least 25 percent of the purchase price, as required by the lender and UAE Central Bank regulations, payable to the seller.
  • Mortgage registration fee equivalent to 0.25 percent of the loan amount, plus Dh290 payable to the DLD.
  • A cheque for the 4 percent transfer fee as agreed, plus Dh580 payable to the DLD.
  • Broker’s commission, if applicable.

After the property is blocked, the seller will deliver the cheque to the lender, although some banks require the buyer to be present as well. After the mortgage is settled, the clearance letter and original title deed are provided to the seller. The NOC process then takes place. When received, the parties proceed to the RT office to transfer the property. The cheques are disbursed and the buyer takes the original title deed.

Mortgage Buyer and Mortgaged Property

Since there are two mortgages and perhaps two banks in this scenario, and all documents have varying processing times and expiration dates, the timing of requests for the liability letter, valuation, final offer letter, and NOC is very important.

After the buyer and seller sign the agreement, the buyer’s bank conducts the valuation of the property and the FOL is signed. Next, the seller requests a liability letter from the lender. Once the liability letter is issued, it is sent to the buyer’s bank, which settles the mortgage with the seller’s bank.

After the mortgage is settled and the clearance letter and original title deed have been received, the parties apply for the NOC. When the NOC is ready, the buyer’s lender arranges the transfer.

At the transfer, the seller’s existing mortgage is released. The fee for the release is Dh1,290, which is paid by the seller. The property transfer documents are signed. The buyer provides the cheques, as described previously, and the buyer’s lender issues a cheque to the seller for the remaining balance of the purchase price.

The buyer’s mortgage is then registered and the buyer’s lender retains the original title deed until the mortgage is paid in full.

  • Even with more efficient procedures in place, some of the steps need to be timed correctly, or the parties risk having to spend additional time and money. It is recommended that the services of a real estate company’s in-house conveyancing team, external conveyancing company or law firm be engaged to avoid such issues.

Can Non-UAE Residents Get Mortgages to Purchase Property in the UAE?

Non-UAE residents can get a mortgage from lenders operating in the UAE; however, there are some restrictions. The UAE Mortgage Cap law requires non-UAE residents to make a down payment of at least 25% of the property value (20% for UAE nationals) plus associated purchase costs. This goes up to 35% (30% for UAE nationals) plus costs for properties above AED 5 million. And if you are buying a second or third property, as an investment, for example, you will need at least 40% of the property value to cover your down payment.

Down Payment Requirements for Non-UAE Nationals (Expats and Nonresidents)

Purchase Type Purchase Price Maximum loan-to-value ratio (LTV) Minimum down payment
First property Under AED 5 million 75% 25%
First property Over AED 5 million 65% 35%
Second, third + property Any price 60% 40%
Off plan / under construction Any price 50% 50%


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