In Dubai, as in many places, the difference between commercial and residential mortgages lies primarily in the type of property being financed and the purpose of the loan. Here we will help explain the difference so you can make the right choice for you and your investment priorities.

Property Type

A residential mortgage is used to purchase or refinance residential properties, such as houses, villas, or apartments. These properties can be used for end users to live in personally, or they can be used for rental income.

A commercial mortgage is used to finance properties intended for commercial use, such as office buildings, retail spaces, industrial facilities, or hotels.

Loan Terms

A residential mortgage loan is typically offered on a maximum loan term of 25 years. In Dubai, if you are looking to purchase a property under AED 5 Million you will need a down payment of 20% if you are an expat. If you are an Emirati National, your down payment will be 15%. For property purchases of over AED 5 Million, expats will require a 30% deposit or 25% for a UAE National.

For commercial mortgage loans, shorter loan terms of 15 years are more common. Interest rates can be higher due to the perceived risk associated with commercial properties. Lenders may require larger down payments and have stricter eligibility criteria and require more documentation.B

Regulation and risk

Lenders for both commercial and residential mortgages are subject to regulation by the Central Bank of the UAE.

Residential mortgages are generally considered less risky for lenders compared to commercial property loans. Commercial mortgage loans are considered riskier due to factors such as economic conditions, market fluctuations, and the success of the businesses occupying the commercial properties. Holo's Commercial Mortgage team is always on hand to discuss your commercial mortgage questions and requirements in more detail.

Before undertaking any mortgage, whether residential or commercial, you should speak with a mortgage advisor to understand your options and the mortgage products available to you.

If you are looking to secure a mortgage in Dubai, let Holo help. Our digital mortgage services include a mortgage calculator and online mortgage application which takes only two minutes to complete. Our service saves you up to AED 5,000 as we do not charge any broker fees.

If you are considering a residential mortgage, head to useholo.com to get started and explore your options.

Or if you need more information check out our online mortgage FAQ .